3w ago

Business Owner Mindset without Becoming a Finance Bro?

I need some advice on making the psychological shift from being a business employee to a business owner. I started a couple of businesses five years ago, and I'm surviving as it is, but I'm right on the lower limit. I can feel that it's my own psychology that is holding me back. I don't struggle with the practical running of the business, my problem is feeling like an exploitative schmuck because I'm charging people money for stuff. I can push just enough to let myself survive, but after that I freeze. It's a big block for me, and I just can't seem to get past it on my own.

I know there are tons of business self-help books out there, but I don't have the time/money to sift through all of them to find the non-icky diamonds in the rough. And I figure there have to be at least a few people out there who have made this transition and faced the same problems. So:

Have you confronted this problem for yourself? How did you approach it?
Were there any resources you found helpful to wrap your head around the transition?
Do you have any experience with business coaches and/or associations, and were they helpful (ie. worth the money)?
Are there any Lemmy/Reddit/Discord/other groups you found supportive/helpful?

Thanks much in advance,

~Archie

37 comments

I have no business experience, but...
my problem is feeling like an exploitative schmuck because I’m charging people money for stuff
Congrats, you have a soul!
- I mean, I appreciate that you felt moved to reply, but this is exactly the super-judgy mindworm I'm trying to kill. Why should I believe that I or anyone else is by definition a bad person because I charge money for products/services? Sure, the business douche who knowingly charges a 1000% markup is a selfish dick but that's not where I'm trying to get to. I'm trying to get to the point where I don't have to be a slave to myself and work flat out 12 hours a day just to keep my head above water.
  
  Hey, that's my bad. I should have put more thought into my reply!
  It sounds like you're priced low in your industry vs the average - assuming your customers like you, and you have more work than you can do, I'm guessing they would rather that you raise your prices slightly and stay in business rather than keeping prices low and folding.
How much is your time worth to you? If you have a business that you feel provides a worthwhile product and the amount you charge for that product does not provide the lifestyle you desire, either improve the product, accept a lower standard of living, or quit/change the business.
If you feel you could charge more but it would be “unfair”, don’t worry, no one will buy it unless you are doing something unethical, like a dishonest mechanic or a doctor who lies to trick people into procedures they don’t need or you have a monopoly on an essential need.
If that doesn’t describe you, then charge a fair price for your cost and time. It seems like you don’t value your product or your time and you are looking for a way to trick yourself into be ok with that?
I'm in the same boat as well. Started my own business about 10 years ago. It does fine, little to no debt, never have to sweat paying bills or payroll. But it never gets that far ahead. Because like you said, once there's "enough", I start feeling like I'm overcharging, or taking advantage. Even tho nothing has actually changed. And likewise, I'm pretty sure it's all psychological. So I'll be watching your thread and hopefully I can mooch some good advice.
And the bad thing is, I've received what I think is good advice. I asked other business owners in this field what they do about being too busy and most told me "increase your prices until you get to the amount of business you want". Which seems like it would solve both the profit problem and my perpetually overpacked schedule; but for whatever reason I cannot bring myself to do that.
- Ok, let's work it out. What do you mean by "overcharging"? I use the same word, but everyone has their own definition. In my head, that means asking for more than I need, regardless of what my service is nominally "worth" on the "market." Whatever those two terms mean...
  
  In my head, that means asking for more than I need, regardless of what my service is nominally "worth" on the "market." Whatever those two terms mean...
  Hah, exactly that. Basically whatever is "fair" in my head. But that pretty much comes down to "any more than I need" like you put it. What makes it worse is the majority of my business is local family owned farms so I feel like I'm taking food out of someone else's mouth if I'm not giving them the best price I can. Even if it's already well below "market value".
  I really think growing up dirt poor broke how my brain sees money and fairness.
There is no such thing as overcharging unless you're charging people for something you don't deliver. The market decides what something is worth. Nobody is forced to pay you more than they're willing to pay you. Also, charge less and people will often perceive your work as being of lower value.
When I started doing private consulting I would pitch my rate at roughly 35× what my salary would have converted to on an hourly basis, and depending on the engagement would be open to negotiating down to 15× while seeking added values like referrals and access to benefits clients could offer at zero extra cost to them but which were high value to me. Nobody was ever forced to pay me more than they were willing, I worked hard to deliver, and clients felt good about what they got and would refer me to others.
Just remember, if you're honest and upfront about what you're charging and what you'll deliver, there is no such thing as overcharging. There's only pricing yourself out of the market or leaving money on the table, and it's much better to start high while being willing to move down.
- Hmm... I'm confused. 35x seems wicked high. You mean if the project was 100 hours, and you would have made $10,000 as an in-house employee for that number of hours, you would pitch for $350,000, and be willing to accept $150,000?
  The market decides what something is worth.
  This is the part I struggle with, that meta-appreciation of the abstract concepts of "worth" and "market." I haven't learned how to believe that those things are real in the way that the person I'm "taking" money from is real.
  There is no such thing as overcharging unless you’re charging people for something you don’t deliver.
  This helps the above make more sense, though. Basically the question is: Did you do the thing you're charging for? Did you do it well enough to justify the price? If so, you're fine. It also assumes that the other person knows what fair market value is. I think my implicit assumption is that they don't, and so I'm tricking them into paying more than they need to (even though I know that my prices are fair). Which is a bit condescending, now that I think about it.
  
  Yep. Keep in mind, when I started, I really didn't know how much to price my services. What I knew was that I was taking the most unique and high-value aspect of my professional skills and selling that, not all the other stuff that many more people could do and that would fill much of my regular work day. I also knew that I wanted to work with the highest value clients that I could, who would appreciate the value of those skills and have the executive authority both to make decisions on spending and to negotiate. So, I targeted CEO, owner, and board-level consulting and training. I also knew that no company pays their employees the value of their work on the open market, because if they did, they would make no profit, and I knew from my work the types of revenues and costs in the types of businesses I would be selling to. So, I went into my first sales confidently stating a figure that I thought was pretty high, and with a negotiation strategy planned in advance for how to adapt and how to use that initial high price positioning to get commitments on additional benefits that could be offered by the CEO and their company at no cost to them but which would have high value to me. That's how I got things to work and to find not simply a fixed rate that worked, but a pricing and negotiation strategy that would lead to good outcomes for both me and my clients where we were both satisfied with the value we were getting out of it.
  In effect, it's a good demonstration of the market determining worth. I really didn't know the worth apriori. My clients really didn't know the worth apriori either. My clients had a budget, and I had a target. Pricing was ultimately a product of those two factors and the skill in negotiation and delivery. Had I only spoken with clients who had lower budgets, the pricing would have worked out differently, or wouldn't have worked at all. So, there is no absolute value of something. Value in a transaction really comes down to the combination of buyer and seller circumstances and their capacity to reach agreement.
Maybe read on anarchist principles of organisation, it seems to solve the main problem of feeling like you are exploiting your employees (or fellow comrades in this case).
Full disclosure I haven't read the linked sources fully but they seem to be on topic:
https://www.ft.com/content/c507cc10-883d-11e9-b861-54ee436f9768 (Couldn't find it in the web archive, but here is a gift link)
https://ephemerajournal.org/issue/management-business-anarchism
As for communities: any anarchist community here maybe able to help with guidance on anarchist principles if you decide to go with that approach.
- The first one is paywalled, fyi. Interesting idea with the anarchist management, except that I'm a one-man shop selling things that I design and make myself (should have mentioned). So my businesses will always be dictatorial by definition since any employees I take on wouldn't be creative partners.
  Plus, an anarchistic perspective might be helpful for an internal structure, but it doesn't solve the interface problem of charging money for stuff.
  
  Well why not look at the job as teaching others how you do your design style and thing.
  What exactly is the problem with interactions and charging money?
  P.S.: I added a gift link, but didn't manage to find it in the archive, so read it while it's hot.
My wife just started her own LLC as a psychotherapist as well. She gets paid mostly what insurance reimpurses so that part is kind of static. However, she does a few other things that aren't paid through insurance and has some been working on getting her pricing right. What I would say to you is that you start charging more and set up a sliding scale based on need. Increase your prices but include language about if there is a financial need this can be altered. She has done it for a few group events and had only a few people ask about it. She then alters their cost based on their need and she even let a few people attend for free. It allows you to raise prices for those who can afford it and still increasing access to those who might need it.
The thing to remember here is that you do your job better when you are less stressed. Overworking and being underpaid means that you are helping fewer people or not as effective helping the people you are seeing. Ethically you need to take care of yourself to help your clients. Its the same logic as self-care. If you aren't there to support you can't support.
Have you confronted this problem for yourself? How did you approach it?
Pretty much, although I'm self-employed (translator) instead of a business owner.
I looked for the average/recommended prices for my trade; it was, like, half. Then I compared the quality of my service with a few of my competitors; my translations were by no means half as good as the folks out there, if anything I'd argue they were slightly better. Then I slowly raised my prices, until they reached the market average.
- That's more or less what I've done (psychotherapist, so also self-employed). The issue really is the aspect of self-promotion, moreso than how much I charge. I keep myself a bit lower than average because therapy rates are over-inflated and tons of people can't afford even 5 sessions, let alone a year's worth.
  I think self-promotion is probably more the issue. Money is an easy point of fixation, but the hard part is putting myself in front of people (ie. doing the social media thing). My schedule is reasonably full, but with the amount of demand these days I could be standing-room-only if I was better with the marketing side of things.
  
  Okay, I wasn't sure if I could jump in here before but knowing your profession now, I think I can speak to it from a client's perspective. My family of 4 disabled people works with several therapists of different sorts (psycho, occupational, etc). Our annual income is greater than the national average and we have a fair amount of financial stability, food safety, etc.
  You should charge people like me more than you charge the people who are having a rougher time. I am grateful that most of our therapists have sliding scales and I'm grateful that I'm able to contribute on the higher side of that scale. Every single one of our therapists raises their fees every year and it's by a reasonable amount. Some of our therapists set higher fees for new clients but keep existing clients at the same tier and then do a percentage increase for everyone every year, and I'm grateful for that compromise as well.
  I want my therapists to have lives as comfortable as mine, the value I get from them is extremely high and it is worth the price. I don't want my therapists to be food insecure, I want them to be able to take vacations (your job is fucking hard!), I want them to live in clean, comfortable homes.
You have gotten a lot of good advice already...
I'm not a business owner or entrepreneur , but in my opinion, you should be able to offer your service for at least enough to pay yourself minimum wage for your own time, plus enough to cover the cost of your business licence, commercial rent, utilities, supplies, shipping, or what ever other expenses you may have.
Think of it as if you are 2 people: the business owner and the employee of the business. In any business the employee needs to be paid at least minimum wage, and the business owner needs to be able to cover all other business costs, otherwise the business is not sustainable.
Maybe it would help to put your earnings into 2 bank accounts, one for business expenses and one for your own "wages".
That's my two cents, hopefully it made sense.
- It does help. I've got the banking stuff settled, but the employer/employee is a good way of looking at it that I hadn't considered before. Thanks :)
I don't own and never owned a business and partially its because of what you are talking about. I can say that if you are just barely in the black then your business is eventually going to fail. Businesses have good times and bad times. A bussiness will lose money at times. The bussiness either has to be funded from the outside or make enough profit early on to setup a buffer fund for bad times. Once you have such a fund its then better to lower your prices to keep profit as low as possible and expand the business. If your business provides something important think about what the effect will be if your business is gone. Think about additional charge as like insurance they pay to keep your business going. Ethical wise you have to avoid spending the money and keep it for its purpose. Assume your bussiness will be in the red at times. You can invest what you have for bad times but it has to be liquid enough to get the cash when you need it.
Are you doing the job to survive or are you doing it to thrive? If you're working 12 hour days to keep the business running, you are probably better off becoming a regular employee with a better work life balance and benefits. You should be charging more to afford to hire people to reduce your workload and afford vacation time.
Charging more also doesn't just have to be about you making more money. You could establish full time as a 30 hour week or take an entire paid month off for everyone. You could focus on early retirement. You could create a charitable foundation or simply donate to a cause you believe in.
Finance bros cannot be created, they should only be destroyed

37 comments