Applying your $ effectively 💰

Previously, we proposed three categories of “problem solving” that you might need to pay for:

Execution, Deliverables, and Strategy

How does what you need impact how you might expect to pay?

Here are a few thoughts.

If you’re buying Execution, you’ll probably end up paying by some sort of work unit

-Support tickets closed

-Drawings checked

-Hours worked

-etc.

If you’re buying a Deliverable, a fixed price quote often makes sense.

But be careful - far too often, fixed price “quotes” are actually estimates based on what is known today, and change orders ($$$) are coming.

Finally, if you’re buying Strategy, the value, and therefore the price, is a little more abstract.

You’ll often end up paying a one time flat fee for short engagements, or a recurring consult fee for longer term work. This often won’t be directly tied to tangible outputs, since you’re paying for access to an expert’s opinion - an opinion that should lead to tangible benefits. If it’s not, maybe you haven’t hired the right expert 🫤

Have you ever paid for something the wrong way? Did it work, or cause issues?

-Brian Schoolcraft

🤔 What Are You Paying For?

So you’ve decided to hire someone to solve a problem for you.

-What are you buying? 

-And how should you pay for it?

Let’s answer the first question first!

Here are three broad categories that I think are helpful:

Execution

You know what you want done.

You know how you want it done.

You’ve got a process

And a manager!

Deliverables

You know what you want done.

You don’t care how it gets done.

You’ve got a list of requirements to meet.

And you just want a result.

Strategy

You’ve got a business objective.

But you’re not sure how to get there😕.

You need help making a plan.

And you’re looking for someone with experience.

There’s a time and a place for each. 

Sometimes you need an operator.

Sometimes you need a vendor.

Sometimes you need a strategist.

Sometimes you need all three - in varying amounts.

Do you think about what you’re buying when paying for services?

Would you define any other categories?

-Brian Schoolcraft

🩹 No Pain, Big Gain

What’s the point in hiring an expert?

Usually, it’s to do something you could have done yourself.

With enough time.

And experience.

Sometimes, it’s worth spending the time and gaining the experience for yourself.

That way you get to keep it!

But often, you just want the result, not the experience.

You don’t have time to fight through the growing pains.

So you hire an expert.

And you pay accordingly.

And you get the gains you wanted.

With a lot less pain!

-Brian Schoolcraft