If you are transitioning from the 9-to-5 grind to running your own show, there is a massive mental hurdle you have to clear. We are completely programmed by the employment system to believe that our time is worth X amount per hour. Because of this conditioning, when we start out on our own, we feel like we can’t possibly ask for more than that hourly rate.
But no. It’s always about the VALUE.
When you sell a product, the price tag isn’t just a simple equation of material costs + overheads (like rent, staff, bills, and tool depreciation) + the time it took to make it. You also have to factor in all the years of experimentation, the messy mistakes, and the epic failures it took for you to get to this final, polished product.
I failed miserably over and over again in my twenties before I finally figured out how to make things stick. Those failures are part of the value. So, yes, some things we sell for £50 might only cost £2 in raw materials to make, but they are worth £50 because of the hidden “sweat equity” and expertise and years of learning the skills behind them.
How much is a haircut worth?
Let’s look at the service industry. Some high-street barbers charge £5 for a haircut, whilst elite salons charge £500. Is the £500 haircut exactly 100 times better? Probably not. But the value is built around a highly personal, professional service, and an experience that makes the client feel luxurious and deserving. They aren’t paying for 30 minutes of scissor work; they are paying for how the experience makes them feel.
To truly understand how disconnected price is from raw materials or time, just ask yourself: What’s the value of a bottle of water?
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At home from the tap: Practically zero
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Out and about at a corner shop: £1
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At a music festival: £2
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At an airport after security: £3
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In the desert, when you are severely dehydrated: Your life savings.
It is the exact same bottle of water. The only thing that changes is the context and the urgency of the problem it solves.
As I say in my book, business, put simply, is just an exchange of value. You don’t need to work 80 hours a week to make a living, and you certainly don’t need to tie your income to the clock. If you can solve a high-value problem for someone, they won’t care if it took you five hours or five minutes to fix it.
You need to get out of the employee mindset. Stop trading your time for low-value rewards, because just because you can do something doesn’t mean you should. If you want to build a business that actually gives you freedom, you have to work smarter and not harder. I was always taught that working hard will reap me rewards, but I can verify that this is not true. I have seen other people work a LOT harder and longer hours than me, and on much less money.
Look around you and figure out what unique problems you can solve using the skills you already have. Stop pricing yourself based on the clock, and start pricing yourself based on the transformation and the value you bring to the table.
