10 Ways to Raise your Value

‘Take me home!’ 

When I was eighteen, I did a stint as a waiter at an evening function. I had only recently learnt to drive, and my employer handed me the keys to her car with the instruction, ‘Go buy more ice!’

I pulled up at a set of traffic lights, mentally running through the checklist of the nervous new driver (handbrake, blind spot, blind spot, check for traffic …) when all of a sudden a young woman emerged from the darkness beside my window. She tapped on the glass with long, red fingernails. Her clothes were provocative: a tight, red-leather skirt and revealing tank top with plunging neckline. She leaned forward and crooned seductively, ‘Take me home!’

She drew out the word ‘home’, like a bead of syrup stretching between a jar and a spoon. ‘Fifty bucks, baby! Take me hooommme!’

At eighteen, I’m not sure what frightened me more: driving at night in traffic in someone else’s car, or the idea of a real prostitute propositioning me. Me! I had only finished school the previous year! The lights changed and I drove off with my heart pounding. In my youth and relative innocence, I couldn’t believe that that had really just happened.

Then, as my pulse settled, another thought occurred to me: this young stranger had just offered up her body, her safety, her very self, for a mere fifty bucks. I was going to earn more that night working as a waiter.

How incredibly sad.

What a terrifying life she must be living if that’s how she values herself. My heart goes out to people living at that level of desperation.

But let’s step out of the world of morals and empathy for just a moment, and examine something strange. This young woman was offering a sexual service for R50. There are women who offer exactly the same services for over R20 000, and successfully receive such fees. For the same thing. That’s a difference of four hundred per cent for a sale of an ostensibly identical service.

How on earth is that plausible?

Taking morality out of the equation, the only real differences are differences of perception. They are differences in perceived quality. One person is labouring at the bottom end of the market and earning a dismal income. The other has raised the perceived value of what she offers and is earning extraordinary amounts.

Perceived quality is raised in a few ways, including:

-        extravagant packaging;

-        location;

-        discretion;

-        perceptions of safety and comfort;

-        customer service; and

-        tone and nature of customer experience.

So, same labour. Same offering. Same basic product. Different branding. Different positioning. Four hundred per cent difference in earnings per transaction.

Please don’t misunderstand me – I am not advocating that you should become a high-class hooker. But there is a principle underlying differences in income that is important and applies across a spectrum of industries. You definitely should become a high-class version of whatever it is you want to be. You should find the leverage. You should be worth R20 000 in one go, and not fifty bucks a time.

Have you ever met someone with less education or less intelligence than you, who is outstripping you financially? Ever seen a less moral, less ‘deserving’ person become wealthy, when you haven’t? Someone who works shorter hours but earns extravagant amounts?

It’s harsh when it happens, and we feel that the universe is being fundamentally unfair to us. But this is the principle at play: becoming wealthy has very little to do with how good, moral, or deserving you are. Becoming wealthy relies only on the principles that create wealth, and foremost among them is this simple idea: it’s not about hours worked. It’s about the perceived value of what you do or what you sell.

The young woman selling her services for R50 will have to offer her services four hundred times to make what the R20 000 woman makes in one transaction. Both do the same thing, but life is going to be very different for each of them.

Do you believe that being the cheapest competitor in your market will make you rich? If so, I hope to disavow you utterly of that belief. In most cases, it’s a path to poverty.

Let’s leave the awkward analogy of prostitution behind, and take an example from the world of consulting. A really valuable business consultant may come into an organisation and make a recommendation. That recommendation, in turn, might earn the organisation millions in additional revenue, or save it millions in costs.

For that reason, the consultant becomes highly valuable. The consultant is able to go to other organisations and show the testimonial from the first one: ‘Joe Consultant helped us to add an extra zero to our annual revenue. His assistance changed everything for us.’

Joe Consultant can now charge immense fees for his consulting work, even if he doesn’t spent great amounts of time actually doing it. Because it’s not about hours. His results are worth millions, and so a few hours of his work can be charged at a very high fee. He has dumped the bricks in his wheelbarrow, and is carrying gold. It’s not about how long he pushes his wheelbarrow for, it’s about how valuable his offering is.

Raise your value, and raise the value of what you do within an hour. Putting in more hours is not a path out of poverty.

How to raise your value

There are at least ten major options (and possibly many more) for how you can raise the value of your labour – in other words, how you can receive more income for the same time you spend working:

1. Improve your qualification

Your first option is to raise the worth of your hourly labour by becoming more qualified. This might mean further study to get a piece of paper to show to your boss, or it might mean investing in soft-skills learning to get better at what you do, and thus become worthy of promotion.

There is no doubt that a qualification entitles you to more money for the same number of working hours. The labour of a qualified doctor is worth more than the labour of a bricklayer, regardless of how hard the bricklayer works.

Additionally, as you gain experience within your employment, you may receive pay increases. As a corporate employee, you could do a course that makes you a better leader, a better speaker, better at sales, or a more skilled builder of relationships. You may even do an MBA (although it’s worth noting that there is increasing evidence for the idea that, while you will earn more money on the far side of an MBA, the detriment to your own life may not actually be worth it).

This is certainly an option for raising your value. However, short of becoming specifically, say, a doctor or a lawyer, it does not necessarily create big shifts in earning potential. By raising your qualification, you will become wealthier, but by small increments and over a gradual trajectory. Do it, by all means. But there are other things you could do as well, or instead. 

2. Make lateral moves to advance your career

It is often easier to get promoted by leaving your place of employment for a higher-level position at another organisation. Increasingly, research shows that people who make such lateral moves tend to advance more quickly up the employment ladder than those who stay with an organisation and work their way up internally.

With a series of cleverly executed lateral moves, you can raise your value significantly over a short period of time.

In extreme cases, you may even be appointed as the manager or CEO of a company at an early age (it’s rare, but it does happen). In such a case, you would have radically amplified your value and, consequently, your income.

An important part of this strategy is making yourself increasingly ‘worth it’. You will need to be seen as a person who gets results, invests in his or her personal growth and development, and is able to take on significant responsibility.

3. Become an industry celebrity

You can also increase the value of your labouring hour outside of traditional employment. When done successfully, this tends to give you a more dramatic rise in income, and I am a big believer in this option.

If you become the big name in your industry – the Branson of business, the Oprah of TV, the Schwarzenegger of bodybuilding or the Clarkson of cars – regardless of what that industry may be, the deals and the money tend to go to you, rather than to unknown practitioners.

It works even on a small scale. You don’t have to be the global icon of dog training, like ‘Dog Whisperer’ Cesar Millan or Barbara Woodhouse before him. You could simply be well known regionally, and that will be effective. When people think about dog training, your name springs instantly to mind, and that’s valuable for you.

Moreover, a prominent public profile changes the scale of your remuneration – not just subtly, but often radically. The average business consultant might earn x for his input and ideas. But let Richard Branson drop by and deliver a half-hour presentation to the same organisation, and he will earn x plus three more zeroes, simply because he is Richard Branson. You could pay a nominal fee to have an unknown speaker at your event, but call on a famous rugby player and, even though he may not be a great speaker, you will need to save up for his fee.

These people have raised the value of their names to become, effectively, expensive brands. Think of it like going from being a Hyundai to being a Rolls-Royce. Both are cars, and perform broadly the same function. But there is a significant difference in perceived quality, value and prestige and, as a result, the Rolls costs twenty times what the Hyundai costs.

In raising the profile of their personal brand, top industry names raise their own perceived value. Their input has great equity, and it alters how they are paid. Nigella Lawson may not be the most qualified chef on earth. She may not be among the top ten, or even the top one hundred, most qualified chefs on earth. So, why is she out-earning most of them combined? The answer is that celebrity status changes your earning potential.

In 2014, I published a book titled Own your industry: How to position yourself as an Expert, which explores this dynamic. For our purposes here, it is sufficient to say that by becoming an icon, you radically change the scale of your earnings. Becoming the big name raises the perceived value of your work per hour.

4. Offer more

If and when you have become something of an industry celebrity, or once your business has become a popular brand, you can dramatically increase the profits you make on any idea by offering complementary products.

On a large scale, take the example of Disney studios. If Disney only made animated movies, its revenue would be limited. But it uses the notion of offering more to increase profitability dramatically. When a popular movie has hit the cinema screens, we can buy endless merchandise in the form of dolls, action figures, key rings, clothing, mugs, balloons, stationery, branded bandages, bedding, costumes, theme-park rides, downloadable music and much, much more. When your fans love what you do, offer more of it.

On a smaller, more personal scale, if you have developed a coaching system that helps people to create spectacularly successful presentations, then, like Disney, you have innumerable opportunities to offer more. Write a book on the subject. Then another, and another. Create an audio CD. Develop an online programme. Sell manuals that guide people through the process. Develop a series of how-to DVDs. Sell a short training course. Then sell the longer version of the training course. If people like what you are teaching, they will generally want to buy more of it.

Offering more needn’t mean making more physical products. It could also translate into intangible offers, such as memberships and subscriptions. If you are the leader of a fan base, you could charge a recurring subscription to some form of online offering and, even if your subscription fees are relatively low per individual, the size of your fan base could translate into a large monthly income.

5. Offer to more

If your income proceeds from a very small group of buyers, there is a cap – an upward limitation – on your potential for wealth. For example, start a gentleman’s hair salon in a small town, and your entire potential for wealth will be represented by the number of men in that town (and that’s your best-case scenario – your cap will be the number of men in that town who use your services). So, you may be a business owner, which is certainly one of the most important wealth secrets, but you will not become wealthy if your particular business model simply doesn’t allow for it.

 However, if you are able to sell to an entire nation, or even to the world, you have removed the cap from your wealth potential. Offer to more people to raise your potential income. This means you will need to think – and find ways to reach – beyond your immediate geographical limits.

I know of one author of a non-fiction book who made it his policy to do three things per day to ensure greater sales of his books. On one particular day, one of his three things helped him to sell his books in China in bulk. He became a multimillionaire as a result.

6. Be the boss

It is very rare – almost impossible, in fact – to become wealthy working for someone else. When you become the person who employs others, thus magnifying your capacity to produce through their paid assistance, the rules change completely.

And employing people is not your only option. Employing any mechanism that automates your work will accomplish the same thing. As the boss, someone or something is doing the work under your supervision, which disconnects you from the hours-to-coins dynamic.

When you own a business, or businesses, other people and resources multiply the value of each one of your hours. If you have ten companies, each with a hundred employees, you have a workforce of one thousand people contributing to your hourly income. That is a substantial increase in your hourly earning potential.

Naturally, there are varying ways of going about becoming the boss. One is to work your way through the ranks within traditional employment and be promoted until you’re at the top. Another is to start your own business. Yet another is to buy one. Whichever path you choose, you have to pursue it intentionally. Very few people ever end up at the helm of a company without having made it their specific goal to get there.

If this is your desired option for raising your value, there are a few specific things you will need:

-        A desire to become the boss (sounds obvious, but it has to be there).

-        The willingness to learn the requisite soft skills, including how to lead people, how to speak in public, how to oversee and coordinate different functions, and more.

-        A thorough knowledge of the industry, not just job functions. For example, you will never become the owner of a TV news station just by understanding journalism. You will become the owner of a TV news station by understanding how the world of news interacts with power, politics and commerce. Understanding journalism is actually a relatively small part of owning a news station. Want to be the boss? It’s a political game. Understand the industry, not just the work function.

-        A basic understanding of numbers, and what they are telling you. Is this business basically worth it? The numbers will tell you.

7. Solve an expensive problem

The basic point of a great many businesses and services is to solve a problem that other people, or other businesses, have.

The more that problem costs them, the more solving it is worth. As a simple example, many big companies lose a great deal of money to what is called shrinkage. If you are able to sell something that helps these companies dramatically to cut the costs associated with shrinkage, then you can make a lot of money. You have solved an expensive problem, and your solution is worth a lot of money.

There are then many formats in which you could sell your solution. It could be a packaged product that companies buy. Or that individuals buy. Or it could come in the form of coaching. Or consulting. Or a myriad of other ways in which you might combine and present the way in which you solve problems.

8. Solve a problem that affects a great many people

A problem need not be expensive. It can be a very simple, cheap-to-solve problem. To create wealth for you, it need only be far-reaching. In other words, a great many people need to solve it.

Say, for instance, that you have a brilliant idea that solves the problem of fingernail biting. Your solution is so basic that you can only sell it for R1 per unit. But you discover that ten million people are afflicted by fingernail biting, and desperately want a solution. You could become very wealthy by selling it to them.

The need for entertainment falls under this category. It’s not necessarily an expensive problem for people, but it is one that most people on earth want solved. Creating a form of entertainment that appeals to a large number of people could generate great wealth.

9. Amplify your effectiveness through networks and associations

Networks and associations are a friend of the wealth-seeker. They are a means by which to amplify your own voice, and to be effective on a greater scale.

If you own a small carpentry business on Second Street, your reach and effectiveness will be limited to the amount of business you can generate. However, if you join a number of carpentry trade associations, and learn how to network within them, you will become known on a much greater scale. And you need not limit yourself to carpentry associations. You can also join and network within:

-        small business associations;

-        associations for entrepreneurs;

-        retail associations;

-        forestry and woodworking associations;

-        and more.

The result of such associations is that your business becomes known beyond the limits of what you may have achieved with advertising and marketing alone. You receive referrals. You become a go-to source. You amplify your effectiveness.

The media is also a form of network. If you don’t make use of this network, your business may only be known in its immediate geographical vicinity. However, through the media, it can become known regionally, nationally, or even globally.

You may also make use of agents, bureaus and representatives. In many creative industries (acting, art, writing, speaking and more), practitioners build relationships with agencies and bureaus that then represent them. When the relationship is successful, the practitioner will earn more as a result of the exposure and selling that the agency carries out on their behalf. They have effectively amplified their potential reach.

You may even create your own network, in the sense of building up a database. Being able to email an entire database of customers in one go, rather than simply speaking to one at a time, is a form of leverage and amplification.

Note that this does not apply to multi-level marketing (MLM), which tends to be a wealth-creation mechanism solely for the owner of the network. When I hear the telltale phrase, ‘I would like to discuss a business opportunity with you,’ I run for the hills.

10. Scale up

Scaling up is the next way to earn more per hour. When you, personally, spend your days running the store on Second Street, you once again limit your earning potential to hours. You may be your own boss, but you are also your own employee. You are still pushing the wheelbarrow.

In business circles, this dynamic is often referred to as becoming the chef in your own restaurant. In doing this, you have not started your own business – you have merely created a job for yourself. There is a difference; understanding it can be a key to wealth.

If you decide not to be a chef in your own restaurant, but rather to be a restaurant owner who hires chefs, you can open a string of businesses. Each of these businesses, if properly run and managed, will bring in unique income for you. You are no longer limited to the hours for which you, personally, can work. You are limited only by how many successful restaurants you can open and oversee.

Escaping the hour concept

Individuals who sell and do deals have learnt that one important handshake can be worth half a year’s wage-based salary. So, their emphasis is not on putting in hours, but on landing deals. Their goal is to set up and accomplish that single hour that is worth so much to them.

Perhaps the most extreme example of this is stock-exchange trading floors, where fortunes change hands every few minutes. The number of hours worked is almost irrelevant. Here, money is earned (and lost) as though it were little more than a form of energy.

Others have learnt to develop passive income streams – for example, by selling products online. While they sleep, people pay them money and, as such, they have escaped the hours equation. Certainly, they had to put the hours in initially. But after that, their gains simply continue and can grow exponentially.

Still others have learnt how to create once and then greatly multiply their reward through multiplication of the sale (in other words: make it once, sell it a thousand times). This applies to anything that can be replicated to a large scale – for instance, recording an album, or writing a book … or even drawing a comic strip …

 

 

Douglas Kruger is a business author and professional speaker. See him in action, or read his articles, at www.douglaskruger.co.za. Douglas’s books, including ‘Is Your Thinking Keeping You Poor? 50 Ways the Rich Think Differently,’ are available at Exclusive Books, Estoril, CNA, and as ebooks from Amazon.com.