How Do I Make More Money as I Become More Efficient?

00:00:00.000 | [Music]

00:00:05.000 | Alright, our next question is from Vinny.

00:00:09.000 | Vinny asks, "How should I adjust my approach to hourly billing

00:00:15.000 | after becoming many-fold more efficient after instituting deep work?"

00:00:20.000 | He elaborates, "Ideally, freelance projects would be either flat-fee based

00:00:26.000 | or an appropriate rate per hour."

00:00:31.000 | He says, "I don't always, however, have this ideal situation.

00:00:34.000 | Take this contrived example. I'm billing $100 an hour with an existing client,

00:00:38.000 | working six hours a day for $600.

00:00:40.000 | After becoming a proficient deep worker, I can get the same amount of work done in two hours.

00:00:44.000 | Explaining this to an existing client would be tough.

00:00:46.000 | Would it be reasonable to continue billing for six hours after working two

00:00:51.000 | hours in an environment where rates can't be raised and clients won't pay by value?"

00:00:58.000 | Well, Vinny, you can't bill for hours that you didn't actually work.

00:01:03.000 | That's not going to be the solution.

00:01:05.000 | The two things you said that can't happen are ultimately the two things you need to happen.

00:01:12.000 | So you may need different clients.

00:01:15.000 | You may need a different structure to your work.

00:01:18.000 | The traditional way you deal with getting better at your work is you raise your rates or you work less.

00:01:25.000 | That is the economic levers you have.

00:01:28.000 | So if you become a more proficient deep worker, it's not just you get work done quicker.

00:01:32.000 | You're probably doing it at a higher level of quality.

00:01:35.000 | So the standard approach there is keep raising the rates you charge.

00:01:40.000 | And now for less and less work, you're making the same amount of money.

00:01:43.000 | Or you switch to the value-based billing that you talked about here, and you can double or triple the amount of clients that you're servicing in the same amount of time.

00:01:51.000 | Those are the two options you have.

00:01:53.000 | Those are the two classic options as you get better at a freelancer.

00:01:56.000 | I'm going to point you towards a book that I talk about a lot on this show, Company of One by Paul Jarvis.

00:02:03.000 | He really gets into this.

00:02:04.000 | He really gets into if you have a business that's basically just you.

00:02:08.000 | And you're not really looking to grow this into some sort of massive concern with tons of employees that you'll one day sell for tens of millions of dollars.

00:02:17.000 | What's the right thing to do?

00:02:19.000 | And he really gets into exactly these issues.

00:02:21.000 | How do you get more from your time?

00:02:23.000 | How do you get paid more for your time?

00:02:25.000 | How do you figure out that balance of how much you want to work and don't want to work?

00:02:28.000 | How do you figure out should I take my increasing skill and efficiency to work less hours?

00:02:33.000 | Or should I take my increasing skill and efficiency to make more money for the hours I work?

00:02:36.000 | He really gets into those questions.

00:02:38.000 | It's the questions you should be asking now.

00:02:40.000 | My only advice here is don't be so quick to say, "I can't raise my rates.

00:02:45.000 | I can't switch to a value-based approach."

00:02:49.000 | I think the reality here is that you have an existing client that's a pain and doesn't like those type of things.

00:02:54.000 | Think beyond that client.

00:02:56.000 | Think about the future clients you could sell.

00:02:58.000 | Think about the future services you could sell.

00:03:00.000 | Think about just being super clear.

00:03:02.000 | This is how I work.

00:03:03.000 | This is how I do it.

00:03:05.000 | Don't take it or leave it.

00:03:07.000 | I'll give you one more book that gets into that latter bit as long as we're talking books.

00:03:11.000 | Jenny Blake has a new book coming out called "Free Time."

00:03:15.000 | Actually, I interviewed Jenny Blake.

00:03:17.000 | There's going to be an interview with her on this podcast soon.

00:03:20.000 | In that conversation, which is coming out soon, and in her book, which is available now for preorder but comes out in the winter,

00:03:27.000 | she also gets into how she had to radically change her agreement with her clients.

00:03:33.000 | Say, "I don't do this anymore, and this is how it works."

00:03:36.000 | Very scary.

00:03:38.000 | You assume that everyone's going to run away and that you're going to be homeless within six or seven days.

00:03:41.000 | Doesn't usually happen.

00:03:43.000 | If you know what you're doing, if you know what you're about, if you're delivering good work, you have more leverage.

00:03:46.000 | We've got to get your confidence up to apply this leverage.

00:03:49.000 | So look at those two books and think, "How can I actually take advantage of my increased efficiency and effectiveness?"

00:03:58.000 | [Music]

How Do I Make More Money as I Become More Efficient?

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