In a nutshell, the difference between following your passion as a hobby… and following your passion as a business… comes down to financial transactions.
In the six years I’ve been self-employed, I’ve logged 700 incoming financial transactions. That’s 700 times when a person has decided to pay me for a service I offer. These single transactions have ranged from £7.50 for an e-product to £1,700 for a series of coaching sessions.
These financial transactions are the 700 reasons I call what I do with my time a ‘business’ rather than just something I love to do. When we have a steady, consistent stream of these financial transactions then that’s what makes a solid, sustainable business which we can enjoy and relax into.
- But before you can have a financial transaction, you need to know how much you’re charging. Too high or too low and you risk losing that prospective client.
- And before you know how much to charge, you need to know what it is you’re actually pricing. ‘Yoga’ or ‘architecture’ or ‘photography’ – yes – but what is the actual unit that someone can buy? How do you package it – per hour, per session, per programme?
- And before you know how to package your offer, you need to know what your prospective client’s needs are. What are you packaging your talents as a solution for?
- And of course before you know what needs you’re in business to meet, you need to know who these prospective clients are who are having these needs in the first place.
If you’re just starting out in business, that might sound like an overwhelming set of ingredients to get in place. There are clearly even more steps than that, and there’s also a lot deeper to go with each step, but you CAN get these simple, bare bones in place in 45 minutes, as I did last week with a client who’s just starting her coaching business.
So… start now, back nearer the beginning:
- Who do you serve?
- What needs of theirs do you meet?
- How can you package your skills to best meet their needs?
- What price is right for that package?
These questions are the start of what makes the difference between a hobby and a business. With a hobby, you don’t need to think about these ingredients; your focus is entirely on you and your enjoyment. Business requires you to look out at that person, those people, who your passion greatly benefits – and to offer yourself in such a way that they get their wants and needs met… and you get paid.
You’re part of a community of people turning their passion into profitable businesses. Join the discussion by leaving a comment below and letting us know:
- Which of these questions are you clear about, and which need more work?
- Have you found yourself avoiding questions like this? If so, what do you think that’s about?
- How do you feel about the financial transaction aspect of your business?
Get It All In Order
We go through each of these key elements thoroughly and step-by-step in the Turn Your Passion To Profit programme. Click here for more details.
© Corrina Gordon-Barnes, 2010
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Wonderful article Corrina and so appropriate for me at the moment
You know that I have this real value on quality and credibility, but it suddenly struck me the other day that if I’m undercharging then that might give out a message of lacking credibility and that the service I’m offering isn’t of quality. It’s about striking the right balance! Thank you for these valuable insights again, you are great at what you do! Laura
Laura – Yes, charging the right price for you is definitely a way of you honouring those values of ‘credibility’ and ‘quality’. And a No Risk Guarantee is a way of creating safety for both your prospective client and for you. I’ll blog about that aspect some time
Thanks for showing up here.
Yeah I think what’s great is to create a professional and robust infrastructure that underpins and support your business … so that you get to carry on doing what you love and STILL enjoy it!
Having that proper pricing and record keeping infrastructure in place should hopefully melt away much of the anxiety of running a business on your own … and enable you to earn well whilst having the time of your life whole heap of fun …
Annie Wigman´s last [type] ..Raising the Bar- Chocolate- Coaching- Feast!
Hi Corrina
Thanks for this and congratulations on the 700! I completely agree that those questions are the most important and most challenging in many ways. It is so easy to get stuck and go round in circles…sometimes we need a support beyond our own vision to help us nail them.
Annie – Yes it’s such a relief when the infrastructure is there – definitely very freeing.
Anon – Thanks
I still remember the very first cheque I received. I walked away holding it thinking: “Did she just give me this much money for doing something I really enjoyed?!” That first taste of self-employment opened a whole world of options for me – and I was hooked.
Anon – And yes, I’ve found having a mentor to be HUGELY helpful in getting me out of my own circles and limitations.
Hey Corrina!
Another helpful article. Pricing causes business owners more angst than just about anything else. It’s got a huge psychological component that rarely gets addressed. It’s easy to be paid by someone else, it’s more difficult to ask others to pay you. We’ve all got strange relationships with money for some bizarre reason.
Thanks! Giulietta
Giulietta Nardone´s last [type] ..You’re looking for obstacles rather than magic
Giulietta – Yes – & there are three segments (at least!) to the money part:
(1) setting the price in the first place
(2) asking for the money
(3) ‘catching’ the money (i.e. do you receive funds via PayPal, cash, cheque, bank transfer etc.)
And yes – there’s a psychological aspect involved with each of those three segments. Phew! No wonder it’s often a stumbling block.
We have one class as part of the ‘Turn Your Passion To Profit’ programme which looks at money and sales, another one which looks at pricing, and another still which looks at agreements. So it’ll get covered a lot!