I don’t offer services for free. I don’t offer consultations as a way to grow my email list, and even my discovery calls are not about giving advice on branding but rather explaining how a certain service can help.
I’m not saying this to sound like a hard-ass.
I’m telling you this because I love to give. I know that building a business that I love is about more than money, it’s about doing what I love and working with people I enjoy. I’d offer strategy calls for free if I didn’t stop myself from doing so. Heck, I’d develop logos for free too. But I know that while doing so would allow me to embrace my purpose of building thriving businesses in the short-term, it would kill my long-term goals.
Every business needs profit to be successful, but every person needs a purpose to develop meaning and joy in their own lives. The two combined is how we build thriving businesses, but which is the driving factor?
This isn’t a trick question, and the answer is pretty simple. Purpose-driven brands are about delivering value to the customers first and foremost. Profit-driven brands are about making money first and foremost.
The result is often the same…at first.
When you approach a business through your purpose, you want to deliver exceptional value to your clients. And, similarly, when you approach business through a profit-first mindset, you recognize that in order to make money you have to provide something of value. Either way, you are delivering value in exchange for money.
That’s where the similarity ends though because when you are driven by a purpose, you keep wanting to do it better. That may be a better way to do it for a single person in a one-on-one service, but it could also be about how you want to do it better for more people overall through a course or group service. As you push delivering value, you can increase your profits through raising your rates.
When building a business with the profit-first mindset (not at all related to Profit-First by Mike Michalowicz by the way) you’ll probably decide to raise your rates at some point to increase your profit margin, and will often need to increase the value return as a result. The difference is that wanting to do better work is not the driving factor toward improvement.
I believe that a purpose-based mindset is better able to adjust with the times and incorporate new thinking and new technologies into how the purpose is achieved.
A great example of this is that of Waste Management as mentioned in Conscious Capitalism: Liberating The Heroic Spirit of Business by John Mackey and Rajendra Sisodia.
They point out that Waste Management’s original purpose was, “Helping the world dispose of it’s problems.” However, the change in values to sustainability inspired Waste Management to not just dispose of waste and hide it away, but to convert that waste into energy again. This change means that our waste may one day be worth money and we could be paid to allow them to take our waste away for us.
If Waste Management hadn’t had the drive to deliver better value, they may never have decided to start exploring and investing in technologies that can dispose of our waste and instead continue competing for landfill space rather than adapting to and preparing for the future.
While building a business driven by purpose is incredibly worthwhile, it’s important to remember that even though you want to help people—and since you love it—it may be tempting to do for free or very low cost, yet you need to make money to stay in business.
Profit (and thereby your clients) are the lifeblood of every business. Just because you are building a purpose-driven business does not change this fact.
Remember to respect yourself and your business by charging a fair price for your services and products in spite of the fact that you want to help everyone. You’ll help more people by staying in business than you would if you let your generosity bankrupt you and cause burn out. We’re playing a long game here. Embrace your inner tortoise.