Stop Selling Your Time

To enhance the value of your company, it’s time to shift away from selling your time.

Charging by the hour or day means clients are essentially renting your time, rather than purchasing a desired outcome. This model lacks leverage and scalability, as growth is contingent upon either increasing your workload or expanding your team. As your own time is finite, the latter option is the only way to achieve long-term growth under this model. However, it takes considerable time to onboard new employees, making rapid and meaningful growth effectively impossible.

One of the key factors that potential investors examine when evaluating businesses is Growth Potential. Essentially, they want to understand how quickly they could scale your business, and nothing hampers Growth Potential more than a time-based billing structure.

Billing by the hour can also lead to dissatisfaction among customers, who dislike the notion of being charged for every minute spent. Under the time-based billing model, clients know that you’re financially motivated to lengthen the term of a project, while they likely desire outcomes as quickly as possible. This misalignment of incentives can result in discontent and undermine the perceived value of your business.

Additionally, selling time opens the door to increased competition. When your service is commoditized and compared solely on price, it invites downward pricing pressure and erodes profit margins.

How Likeable Media Transformed its Billing Model

Carrie and Dave Kerpen launched Likeable Media, a social media agency, in 2006. As Facebook gained prominence, marketers sought ways to capitalize on its platform.

Initially, Likeable Media adopted an hourly billing model but soon recognized its limitations. Clients weren’t interested in purchasing their time; rather, they wanted tangible social media content—videos, blog posts, and tweets.

To address this, the Kerpens introduced the Content Credit System. Each piece of content was assigned a specific number of credits, and clients subscribed to an annual credit allocation that they could roll over each month.

This innovative approach revolutionized Likeable Media in several ways. Clients were no longer buying time but instead paying for concrete deliverables. The credit system streamlined upselling opportunities, as clients could easily purchase more credits for additional content.

Furthermore, the Content Credit System generated recurring revenue through annual contracts, significantly improving cash flow by securing upfront payments.

Most importantly, this shift enabled the Kerpens to focus on building a team. By 2020, Likeable Media had expanded to over 50 full-time employees, catching the attention of 10Pearls, a digital strategy company, which acquired the agency for 8.5x EBITDA—a substantial premium over traditional marketing agencies.

In essence, if your goal is to cultivate a more valuable company, you need to stop selling your time and instead, prioritize delivering results for your customers.

Contact us here to learn more ways to increase your business’ saleable value.