Christopher Murphy · 6 June, 2020
The trouble with selling time as a business model is that it ties you to time, and time is finite.
If your business is service-driven and you're selling units of time, you’re locked into a zero sum game: there are only so many hours in the day, days in the week and weeks in the year.
Factoring in: holidays; sickness; research, development and training; networking and marketing; and dealing with clients (meetings, entertainment…) and you soon discover that the hours and the days available to you to sell, are limited.
Those limits act as a ceiling on your potential profitability.
Selling More Units
If you’ve built your entire business model on selling units of time, there’s a limit to how much your business can grow.
The only way to scale a business that sells units of time, is to employ more providers of those units (employees), pay them a salary for their time and profit from the differential between what you pay those employees and what you charge your clients.
Your employees – depending upon the mix of skills and experience they bring to your business – can earn you more or less of a differential. You are still, however, constrained by time.
If your business is products that capture the value you offer – on the other hand – you’re unshackled from time and no longer a prisoner to the zero sum game.
The real magic happens when you shift your emphasis from selling time to selling value. Value is a much more flexible unit. (And you can sell a potentially infinite number of those units.)
Questions of value are questions of perception. Here's an example from the last few days…
Spending some time creating an automated social media calendar – in Notion or Airtable, for example – might be a great use of my time or it might be an expensive use of my time. That depends on who I am, how I value my time and how this product is positioned.
Depending on how I value my time, I might pay £100s or £1,000s for a system that takes care of that for me.
Imagine you're a designer with the ability to create the social media calendar detailed above. Rather than finding clients to build calendars for and then setting them up (a repetitive and time-consuming process) a far better use of your time would be to build a product.
If you invest your units of time into creating an automated social media calendar that satisfies most users' needs you'll have a valuable product that you can sell over and over and over.
Build it once, sell it multiple times. Even while you sleep.