Assuming you want to make more money, have you ever considered there are just three ways to make more money?
1. Find more people to pay you. This might imply taking a second job or multiple other jobs including selling stuff on eBay. If you are an employee and think like an employee – all you have to sell is your time. So sell more of it. If you are a bit entrepreneurial, you can always sell something besides time (which still takes your time) by finding new people to pay you for your stuff. Note that of the three methods, this one is the hardest to do. It is the same problems companies have when they need to get more customers. We call is customer acquisition – and the cost of customer acquisition can be high. In your case, you give up more of your life and also have to find that other customer who is willing to pay you.
2. Get your customer to pay you more frequently. If you are an employee you have this one licked since your employer already pays you on a regular basis. But as a way to make more money, this is still something we need to look at. A business can get customers to purchase more frequently. How? Provide great service is one way. But for you, if you do not have an employer paying you frequently, how do you make the money flow more often? For instance, if you are an on-call independent contractor, what could you sell more often to get them to take out their wallet? The independent computer technician will often try to get a maintenance contract where he or she will come in periodically and service equipment to keep it running instead of waiting for something to break. If you are not being paid frequently by one of your customers or employees, what can you do to make that happen?
3. Add more value. While your employer is already paying you, what else can you do? Forget the political concept of a “promotion.” Instead think about what other roles you could do. Could they pay you an incremental amount more if you do some other things, even things that are a slight increase in what you are doing? Perhaps you can take over the roles of a vacant position – or even some work from your boss. If you go to a fast food restaurant, they do this by asking, “do you want fries with that?” You are already buying fast food when you here this statement. So the food chain figures if they can just add a little more value while you are already paying they can make more money.
Note of the three listed above, they are in reverse order of difficulty. The easiest way to make more money is to get the people already paying you to pay you more when you increase your service to them. The hardest to do is finding new customers.
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Dale,
Here are some pretty interesting women entrepreneurs who found people to pay them.
http://money.cnn.com/galleries/2011/smallbusiness/1109/gallery.most_powerful_women_entrepreneurs.fortune/index.html
These are great articles with people (women) in various fields. Another listing of great examples can be found in Jonathan Fields book “Career Renegade”
Interesting concept but it feels like gambling. You walk in the casino, place your bet, and hope to get a payout. People usually travel in the direction where they can “see”. I think that is the most shocking concept when the reality is that we don’t have any control as an employee. Another interesting point about doing more and hoping to get rewarded later is to compare and contrast the concept of gambling. Most people enjoy it. Why? Is it controlled risk? The point is that the loss or risk is visual. I can only lose what money I brought with me to the casino but I have everything to gain. The thrill of winning is why people enjoy it. The challenge is to have more money available to loose in order to increase your chances of winning.
Adding more value to your employer involves strategically acquiring more time or being more efficient at what you do. If more time equals more opportunities or “more money at the casino to lose”, then your chances of getting paid more are increased. The question in my mind is, “how do you leave an invoice?”
The concept of “all you have to sell is your time”, I find it very interesting. Never thought deeper on it, and worst, never considered ‘the value’ of my time, or how much is worth. I don’t think that my ‘cubicle’ experience is any different from those who are living it, but the option of “finding new people to pay you for your stuff” is absolutely a good option for me. This weekend I’m going to the streets of BHM, to make an extra income (taking into account the value of my time)…
I really would need some help in the concept of “making the money to flow more often” specially when the customer is very ‘inc’. I found it a bit complicated and hard to believe that it works. I will say that 99.9% of the time I deliver to ‘my customers’ what they need and value. For example, today was my day off, and I received a call from my supervisor’s boss. Today I provided then with a great service, solving the issue and they appreciated me coming to work (at least for 1 hr). Even by solving something, that they valued, (and this is one of the many times), I don’t think it will increase the frequency of the pay. I may disagree with you because sometimes providing a great service, doesn’t mean the money will be flowing more often. I think the reason may be because of my ‘cubicle inc’ case.
I agree with “adding more value”, and it’s already into practice (I think it’s a slow process when working in a complicated ‘inc’). It was interesting finding that who you think may know ‘the value’, in reality does not know. I strongly believe in providing the necessary and the extra. Sometimes assuming things, it’s when the “assumptiontivitis” starts and pull you off. I strongly agree and believe in this, already shared it with many people…
Thank you for challenging my mind, and for making me believe again!
It seems that with options 2 and 3. It would be beneficial to be in a positions where your employer approaches your compensation on a project or activity basis. Is it likely that employers will move toward that approach in the future?
If you will do number 3, and do it well, you should find it easier to do number 1. That is, the more value you add, the more your reputation in your community rises and the more people in your community should be willing to be your customer. It may mean that you can get involved in short-term projects with other companies. The flexibility of operating as an independent contractor buys you much more opportunity on cashing in with number 1.
The temptation is all too strong, especially for new business, to compete in what Seth Godin refers to as a “race to the bottom” – that is, to compete using the WalMart plan and drive prices down. When we do that, we undervalue our services and undervalue ourselves in the business market. As your business grows, you may find yourself needing to raise prices but your current customer base has become accustomed to your low prices. You may lose customers who came to you only on price because they will not recognize the value you add. It’s always easier to keep a customer than to replace one. That being said, price competitively out of the gate but add unique value that keeps the customers coming your way, and gets them telling their friends about you. So, another way to make more money is driven by changing your pricing model.
Those that provide content should find it fairly easy to perform number 2 if they will just think a little bit. What if you repackage and repurpose content that you’ve already created for other customers? That means that one blog entry or set of blog entries could turn into a series of podcasts, a workshop or seminar, a training class or even a book. Those same posts could be published as magazine or newspaper articles or could appear as guest posts on another more highly popular website.
In my opinion it remains fact that your community is the best source for you to realize more money from all of these options. They are the ones who know you best and have the experiences with you and your product. As you are building a new business, especially if it is in a different field than the one you’re in now, you will likely have to spend some time creating a new community. Crush It! by Gary Vaynerchuk has a great chapter on the ways to do this. And don’t just take from your community – give back to them too. Zig Ziglar summed it up best when he said “You can get all you want in life if you help enough other people get what they want.”
Point #3 sticks out to me the most. The reason is the disconnect between the way things should work and the way they actually do work.
Intuitively, you would expect if you add more value to your current employer, then they would pay you more money. I’m sure some people make that work, but I bet most people in large companies find that their company doesn’t have the flexibility to work this way. I think this is why so many people are interested in points #1 and #2. They are frustrated with their inability to get point #3 to work with their current employer.
It will be interesting to see, as the opportunity to do freelance contract work improves, if big businesses are significantly hurt (with respect to keeping their top performers) by their inflexibility on pay and their inability to match pay to value added.
In my experience, I find these three ways to find value or additional value as a measuring mark or goal on how I am expanding the capabilities of my business/myself.
For example of reason one, I was able to find more people to pay me money by creating a new company on something that i enjoy doing already, enjoying Spanish food and wine. I found ways to be competitive in this industry by selling through Amazon and finding value where other providers overcharge or monopolize the market. Amazon has open my business to new levels and I am still expanding the way of doing business and building new business models through their extraordinary business reputation, logistic channels and technology capabilities.
This leads me to point two in which I am findings new ways to expand the business by offering new services or products that the same customers I am capturing would like to purchase. These are in the catering, cooking classes and events.
At the same time, I search and think of new ways that I can provide value to my employer by either finding new ways of doing things better, leaner processes or executing quicker which in turn leads to better productivity and take on more projects. Also I am looking to be cross-trained in other areas of the business that I have not had exposure so far and could lead to new opportunities where systems will integrate within the division.
Most of us try to solve the ‘career transformation puzzle’ at some point in our careers. Over the years, Dale has worked and achieved siginificant success in putting forth career transformation in specific actionable steps. I admire Dale for taking on such a real and a widespread problem. This article is another piece of that puzzle.
While the first option is most rewarding, as Dale points out – it is the hardest. I think it is mainly because sometimes you need to be ready to risk your existing career to get success out of the first option, and though many of us may not be working our dream jobs, we still attach a lot of value with our existing career. But, as Steve Jobs once said – getting kicked out of Apple was the best thing that ever happened to him since that caused the start of Pixar, I think people who are attracted by option#1 must have faith that the end result will be better than what they currently have. It usually is.
In a retail business I owned, we found that Adding Value was critical. Service, product availability, and competitive pricing added value to the customer. Understanding their needs and providing choices produces and service. We sent out customer surveys for establishing our ranking with the customers so that continue improvements could be implemented. In the first 2 years sales volume increased 20%. As the economy tanked we found that pricing was enough to keep the customer volume need to maintain business overhead. Even though we had satisfied customers the economy forced alternate consumer choices. In this situation getting customers to pay more or pay more frequently was ineffective.
What I think to do differently: Maintain a product and service with low overhead; find a niche that consumers need; maintain and add customer value; reach a market where you have maximum exposure, such as internet sales. Just think, if you have a widget that cost $2.00 to produce and can sell for $8.00 and 10,000 internet consumers want it and rate it highly you just made $60,000. Well the internet has a lot more than a 10,000 consumers and adding customer value in web marketing, packaging, service, and pricing will increase that volume.
Deriving Customer Value is stated in a proposition in an article by Janice Hurly ()
http://www.genesis-analytics.com/files/Value_Propositions_for_Institutions_in_the_Financial_Services_Sector__Edited__090606_JK_v3.pdf
“Received wisdom in the business world has it that there are “devil customers” and “angel customers” –
and your company’s profits … ride on your ability to rid yourself of the first and attract the second …
That’s nonsense … there’s no such thing as an unprofitable customer – just one you haven’t figured out
how to make money on yet. And if a customer is truly unprofitable, that’s the company’s problem, not the
customer‘s.” – Dick Kovacevich, CEO of Wells Fargo. http://money.cnn.com/2006/06/09/magazines/business2/bankdifferent/index.htm
After I read this post, I visited the comments section and I noticed a few people that felt like this was a little scary or difficult. In the hopes that I may help someone move a little closer to taking action I want to share one of my recent learning experiences. Last month I submitted a business idea to Dale in which I had more questions than answers, and the best comment I received from Dale was that I should start small. He encouraged me to start something small and possibly free initially. Now don’t get me wrong, I knew that Dale wasn’t telling me to do everything for free, but rather that I take some time to get an understanding of my product and my customers. Does this sound familiar?
If you haven’t read “The Lean Startup” by Eric Ries, I highly recommend it or at least check out Eric’s “Evangelizing for the Lean Startup” podcast on iTunes U. At the heart of Eric’s message is this notion that you can make an extremely high quality product that you think is great, but if no one likes it or wants it, then you’ve wasted your time and money. In his book, Eric highlights the importance of building a product that people want by testing the market early with a minimally viable product, and then working through an agile approach to developing the product. The goal in this process is to determine who the customer is, what the customer wants, and how well the product solves their problems. If we need to change our product or market, we should be able to adapt by pivoting early on.
If this still sounds difficult, let me present it in this manner…
Before you waste a lot of time and money trying to build the perfect product, make a website for your prospective product or idea and see how much interest and feedback you get. You don’t even have to have a product in development to test out your ideas or assumptions. But by opening customer communications early and often, you should be able to improve the product and possibly highlight new areas of opportunity.
I wouldn’t have said this a couple years ago, but I’ve found that number 3 can be easier and more effective than most people realize…
Sometimes, it’s as simple as stepping back from your work and thinking about how you’re spending your time. Is the report you’re creating useful – or are you doing it just because the calendar reminder popped up? If you investigated a few different vendors for the parts you’ve been buying for years, could you save 20%? Those are trivial examples, but it’s part of a bigger theme.
If you really want to add value to a business, I think the first step is to understand the business from a higher level than you’re at now. Put yourself in the position of the people one and two steps up from you and figure out their priorities. Are you working on something that person would consider worthy of your time (i.e. your pay)? If the answer to that question is no, then stop – now. Sometimes, the fastest way to add value is to reduce waste. On the contrary, anytime you can do something that has a measurable impact on the bottom line, do more of it!
In the past, if I got rewarded for something I did well, I thought it was just that – a pat on the back for putting in some extra effort. Looking back though, it wasn’t because what I produced was fancy or particularly special – it was because had I added some tangible value to the business.
Finding more people, who ask help on what I do on my regular job is easy for me so number 1 worked for me many time, I contact new people to work on multiple job of the same work what I do in my regular work. I worked out on my products to reach more people, help the companies to reach out more people, get more business and get more bonuses. Zig Ziglar’s quotes “If you can dream it, then you can achieve it. You will get all you want in life if you help enough other people get what they want.”
Add more value to what you do, definitely returns its value… may be what you expect… or may be an appreciation… but definitely it will lead you to high end. Once you reach in the high end, you can ask more and you can ask more frequently. In corporate cubicle world number 3 doesn’t increase my pay, but it helps me to land on new better positions.
I’d like to add to Jason Carter’s post. I agree with Jason. Currently where I work it doesn’t matter how much value you add. The pay increases are set and the same for everyone across the board in the company for that fiscal year. It is announced at your annual review. Since I’m a subcontractor for a prime contractor supporting the government this is interesting that my employer doesn’t even send out a survey to the supervisor I report to each day to determine my annual increase.
If you do more, typically my experience has been that it is expected and not necessarily rewarded. Maybe this is different is a sales position. In the engineering field that I’m in as a Senior Engineer they seem to just expect great things all the time consistently.
Although I agree with find the facts found within the article correct, I think that it would have reached a broader audience had the information been relayed in a means in which a person in the “real world” would have been able to relate to. Let me explain. The article covers three ways in which a person could make more money in an “ideal” scenario, but what about the added obstacles that one would face when attempting to do so with the common obstacles the everyday Joe faces. For example: A person would have a hard implementing the mentioned suggestions if they were older, had kids, limited education, a need for additional benefits due to a physical deficiency, etc.
Although I am fully aware that there is not a one answer fits all solution to increasing one’s income, i think that this article would have even more inspiring had it covered the initial preparations needed in order to get to a point where the “3 Ways” could be incorporated within a plan. I guess what I’m saying is that article sort of picks up several stages later. Like picking up a good book and starting in the middle. So many important chapters vital to building a solid understand of the storyline were omitted.
“DO YOU WANT FRIES WITH THAT” That is the statement that made me really see this working for me. When you are in the employee position you often see yourself as just in the rat race of the corporation you work for. When you put yourself in a position to ask for more work you let your employer see you as an asset by asking for additional work which makes them want to pay you more for your abilities. Just to think because you offered to do more you can get more from the customer which in turns made you an asset to your organization.
I love this thought process and I hope when present, future and possibly my own customers someday will gain from me adding this as a principle to approaching all things business related.
I would agree with both of you on this issue except for one thing – it sounds as if you are defeated. Let’s look at reality. If you have a job and you do a better job and do not get rewarded in some way for more output, you are in the wrong job. Even a lawn care kid knows he can double his income if he doubles his output. That is just the way the world works.
Now I get it that in large companies things are not always that easy – but I think you might also be talking to the wrong people. If you look for middle management to give you the boost, it will likely not happen. You have to find a way to influence the decision makers. How do you do that in larger companies? Here are a few ideas.
– Do reverse interviews with the leaders. You will get noticed, find out what the problems are, and likely be able to move to a position that you can really add serious value.
– Take on projects no one else wants. Now this is old advice – so let me add that you need to make sure that the project will produce REAL value.
– Do something that generates to improves the company income. Many technical people are not in sales positions, and often in support roles or development roles. What can you do to impact income?
Overall, if you just throw up your hands and say “I work harder and harder and get no benefit for my effort”, you are doing something wrong.
If done wisely, #1 could be a viable option. Most successful business owners have multiple streams of income. The way to do this wisely is to manage time and resources effectively. Given that there are only 24 hours in a day, there is only so much time for sale. Therefore, finding a project or job that pays for production vs. for time as your additional income stream.
Adding value applies in every situation. Finding more people to pay you is valuable in every situation and if you cast a wider net and are able to capture more customers (whether at your job or outside of it), it will increase your income especially if you’re always finding ways to add value.
If done wisely, #1 could be a viable option. Most successful business owners have multiple streams of income. The way to do this wisely is to manage time and resources effectively. Given that there are only 24 hours in a day, there is only so much time for sale. Therefore, finding a project or job that pays for production vs. for time as your additional income stream. For a time, I sold directv systems. This was done door to door at my leisure and I made $75 per system sold. At one point, I set up a booth at a town carnival and made about $400 dollars in about 6 hours. Time management is key.
Adding value applies in every situation. Finding more people to pay you is valuable in every situation and if you cast a wider net and are able to capture more customers (whether at your job or outside of it), it will increase your income especially if you’re always finding ways to add value.
#2 is great. Being paid more frequently is always the way to go. It shows that the customer trusts you, and it is reliable, ongoing cash for you. Ideally, you are charging for little or no time spent by you. That’s why this is a great chance to try outsourcing.
I find that #1 is the easiest of the three provided options. A second job doesn’t have to be going to work for someone else earning a paycheck. Most people have a hobby they could earn extra income from without turning that hobby into a “job”.
Think of all the things you like to do outside of work. Why couldn’t you teach someone how to play guitar in your free time? Maybe freelance for your local paper?
I think that being innovative and looking for ways to make money doing things you already love doing is the key to breaking out of the corporate mold.
I agree with your basic logic, that it should be easier to figure out what your customer wants and provide more if it; thereby earning more money because you gave more of what they value. Unfortunately, I think one of the ways corporate America is most successful is in removing the ability to offer increased compensation. It almost seems like no one really has the ability to provide increased compensation, but everyone in management has the ability to identify more goals.
I think that one of the reasons people leave companies is because they feel like they are working for an unknown entity. They do not know who pays them. Therefore, they can rarely figure out what that person wants more of. After a few years at this cycle, I believe people start trying to do #s 1 or 2.