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We have been taught to trade our time for money, but there comes the point where we are allowing a disservice to ourselves by operating this way. The more of an expert we become in our field, the less time it takes us to reach a result, and that result is usually of higher quality than what others with less experience can provide. By continuing to trade our time for money, we will need to put in more and more of our time to reach our desired income.
In this episode, Mike encourages you to trade your expertise and value for money instead of the time it takes you to provide a service or result. People typically don’t ask you how long it took you to reach expert status in your industry, they usually ask how long it will take you to complete the task, but we need to provide a reframe for this way of thinking. Mike walks you through how to convey your value and expertise, and justify premium pricing for the experience that you have, instead of the time it takes you to get a result.
Quote from the episode:
- “Don’t charge for your time, charge for your result.”
Key Highlights:
- To make a fortune, trading hours for money will take a great deal of your time
- The more expert you become, the less time it takes you to do something
- If we charge by the hour as an experienced person, we lose money
- We need to take a lesson from Picasso’s rules: value your expertise on your outcome and the result and not the number of hours
- Mike explains how to get past your clients thought processing of paying by the hour
To Connect with Mike:
LinkedIn: https://www.linkedin.com/in/mikemalatesta/
Instagram: @malatesta.mike
Get Mike’s book “Owner Shift”: https://mikemalatesta.com/owner-shift-book-by-mike-malatesta/
Full transcript below.
Watch the video version of this episode:
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Transcript of the episode:
On today’s episode of the HOW’D IT HAPPEN podcast, I am talking about trading hours for money, which is the typical way that people exchange their labor for a wage or for payment. And I want to encourage you, and I will encourage you think about how you can trade results for money as opposed to trading your hours for money. I hope you enjoy this episode as much as I did, making it, and hear this:
Mike Malatesta:
Hey, everybody, welcome back to the HOW TO HAPPEN podcast. This is Mike. And I’m so glad that you’re joining me today for this solo episode. Today’s episode is called Why hours are not your friend. Why ours are not your friend? Well, in life, they’re your friend. Because the more hours you have, the longer you live, but but but, you know, productivity and efficiency and a business standpoint, hours are not your friend. So maybe you’ve heard this story. It’s about the painter, Picasso at least that’s how I’ve heard the story attributed to Picasso. And it goes like this, a woman approaches him at a market. And she tells Picasa that she’s a big fan and asked if he could draw something for her. And he obliges, and he draws her a beautiful picture on a piece of paper that he had or on a napkin something and he hands her the drawing. And he says, that’ll be $1 million. And the woman’s like, what she doesn’t understand. But it only took you 30 seconds to draw it. She says Picasso pauses and he says, my good woman, it took me 30 years to be able to draw that masterpiece for you in 30 seconds. And here’s the lesson I took from that story. It’s hard to make a fortune trading hours for money. Especially as you become an expert at something, you think about it, the more expert you become, the less time it takes you to do things that may take other people more time. And so if you’re getting paid by the hour, the more hours you have to work just to stay even. And it’s kind of a weird thing, right? Because when you, you know you’re an apprentice at something, or you just get started at something, in most cases, and I’ve run a lot of businesses, I can send a person who has, you know, for charging by the hour, I can send someone who has zero experience, and they’re gonna take, you know, X number of hours to do it. And I could send my best person who has eons of experience and that person gets that same job done in y time. And let’s just say for the sake of argument that y is half of x. So I’ve actually, as a result of sending a more experienced person, charging by the hour, I’ve earned less than sending a an inexperienced person, which is kind of strange, right. But most people learn, just like I learned that work is about exchanging time for money. It’s a simple equation, and everyone understands it, right. And it can be a great equation when you’re comparing two equal people or outcomes. For example, two experts and two versus two inexperienced people because nobody wants to pay more for the same thing, right? People say, Well, I don’t want to pay two hours for something I can get in an hour. That’s what they think intellectually, but then they end up doing it all day long. And so that while it’s easy to understand, it can be a lousy, lousy way to sell yourself or to decide on a purchase, because let’s face it, how often are two things, whether they be people, machines, trucks, processes, etc, really the same? And, you know, the standard question is that we’ve all been taught as well, how many hours will take you? And how much do you charge for your time, but no one ever asks, how many hours it took for you to become an expert? And is that how you want to value your expertise, like by the hour? Or would you rather play by Picasso’s rules, where you value your expertise and your ability on the outcome on the result and not on the number of hours, it’s a very popular thing. Now and and I hear about it all the time where people are like, you know, charge for your don’t charge for your time charge for the result. And I believe in that I think that is the right thing to do. But I will also say that it’s not an easy thing to do for a couple of reasons. One, your results have to be really good in order for you to be able to charge for them and to be able to charge a premium versus what someone would charge by the hour to do it. So you it’s got to be something that’s not a commodity it’s got to be something that people value and that you are actually a true expert in that your results are better and faster than anyone else’s. Any other comparable person’s or company’s results. You like what I’m doing with this podcast and want to participate in more of the things I’m thinking about and exploring, subscribe to my newsletter today, it’s super simple. Just go to Mike malatesta.com. Right now, put in your email, and you will get the very next issue. It’s short, thoughtful, and designed to inspire, activate and maximize the greatness in you. There’s a whole mindset that you need to break because when you walk into a meeting, whether it’s personal meeting, or whether it’s, you know, a company that you’re trying to sell to, you are being defined right away as a commodity. That’s because that’s how people are trained to define these things. Right? How much is it? How long is it going to take it, take you to do it, x times y equals Z, and that’s what I should be charged. And if you’re less than the other person, I’ll choose you. And if you’re more than the other person, I won’t. It’s hard to break through that mindset. But it is possible because people need to understand that they’re not buying an hour, they’re buying a result. So one of the ways I found, especially in a business situation that can help you get get past that if you don’t play the game. So even though people are trying to define you by your hourly rate, I find that if you take the time to really understand what they want, and take them into the future, like let’s get out of the present, let’s get out of this room, let’s get to the future when the project is finished, and get them to describe what they want it to look like and what they resent what the results would be. And then if you can deliver that then you can get out of the how many hours it’s going to take and you can get at you can get into a discussion about how my expertise is going to give you the best result, the one you just described to me you want it in the future at a price that is better value than anyone elses. So the point of this short one is just listen, charging your time for hours or, you know trading your time for hours is an easy thing to do. I just think it’s not a helpful way to think about your value or the value of your company or the value of anything that you’re doing. But, but be sure that if you’re going to depart from that you actually have the goods you actually have the goods that you can deliver, that would allow you to be the Picasso in your life to take your 30 years of experience or your 10 or 12 or your 15 or whatever it is, and create something that no one else can create, regardless of the number of hours that they put into it. Not easy, but definitely something that I is possible. I know it’s possible because I’ve done it. And I also know that it will never happen unless you take the first step toward making it happen. So thank you for joining me for this episode and investing your time and energy in my podcast. I hope that you got some positive return on that investment today. And if you did, please consider subscribing or following my podcast so that every episode will come to you automatically. And until next time. Please maximize your greatness and make your future your property. Something that you design and are proud to welcome. Thanks for listening to this episode of The how that happened podcast where we believe that success doesn’t happen. Unless you make it happen. You can subscribe to the podcast on Apple podcast, Google podcasts stitcher or wherever you like to listen. And while you’re there, please rate it and leave a comment as well. I’d love to hear your thoughts about the show ideas for future guests or whatever you’d like to share. And of course you can always find me at Mike malatesta.com See you next time. Thanks again for listening to the HOW’D IT HAPPEN podcast.
