Money buys time and space
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“A woman must have money and a room of her own if she is to write fiction.” —Virginia Woolf
I’ll come back to that Woolf quote in a moment, because it matters far more than just about fiction writing.
But first, I’m going share with you a fact I find really aggravating: entrepreneurs today still do a terrible job of making this line of work open to marginalized groups, including women.
Year after year, self employment tracks upward across North America (and similarly in most other industrialized economies).
Studies like this one (https://krueger.princeton.edu/sites/default/files/akrueger/files/katz_krueger_cws_-_march_29_20165.pdf) by Princeton academics talk about how “nearly all of the 10 million jobs created between 2005 and 2015 were freelance.”
And yet for all that growth, there remains a huge income gap between the genders: women entrepreneurs earn 58% less (https://www.newswire.ca/news-releases/new-research-reveals-canadian-women-entrepreneurs-earn-58-per-cent-less-than-men-690897031.html) than men.
Why is that?
There’s a long list of socio-economic reasons that I’m not going to get into here because this is just a simple little newsletter.
What I will do, however, is break off a small piece of the problem and give you my take on how we can do things better for everyone.
Money is a problem in this line of work.
To explain what I mean by that, let me go back to that Woolf quote. I caught this keen observation about it by Austin Kleon (who has a brand new book (https://austinkleon.com/keepgoing/) coming out soon).
He notes that when many cite it, “they quote the room part and leave out the money part” and adds that doing so is especially curious, considering that “money buys you both the time and the space.”
I’ve been in this business (https://thinkitcreative.com/services/consulting/) now for nearly two decades and one thing that almost never gets taught is how we can help each other have a better relationship with money—in particular, how you go about making it.
Too many entrepreneurs still charge by the hour for their services. And that holds a lot of them back from sustaining and growing their businesses—especially women.
A 2018 survey of consultants (https://www.consultingsuccess.com/2018-consulting-fees-study) found that more than 25% of them still pick hourly rate as their preferred structure for charging fees in their business. It’s not a coincidence in that same survey that a similar percentage aligns for the lowest average fees per project and the lowest monthly earnings (each less than $2k).
There are three reasons why that choice hurts a business and keeps people from growing.
First, it severely limits the amount of money you can make on an hourly basis—and by extension, daily, monthly and yearly, too. Second, it puts a cap on how valuable your time is, limiting your ability to find new and better clients. And third, the more skilled you get, the more that hourly ceiling punishes you. As you get closer to mastering your craft, it should take you less time to produce work that keeps increasing in quality. Why in the world would you penalize yourself for this?
Don’t commodify your talents. Pick a better fee structure. Charge by the product, negotiate a retainer fee, bill against a per-diem rate or develop a value-and-ROI based approach.
Each of those means doing extra homework and figuring out the value of the outcomes you achieve through your work.
That’s a very different mindset than simply determining what your work is worth to you.
Develop a better relationship with money. And help others do so, too. It unlocks the space you need to be more choosy about the projects you take on and puts a premium on how you spend your time doing fulfilling work that helps your business grow.
Very best, Patrick
P.S. You help make a difference, too. Do so today by sharing this newsletter with a friend.
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