How I hosed myself with a terrible pricing structure at 15 years old

If it wouldn’t have eventually started raining, my whole business structure would’ve blown up in my face.

It was early May, I was 15 years old, and I wanted to try something new. I had done the side jobs, worked for the neighbors, cut firewood.. But none of this excited me like the thought of making my own money. So, I called a few buddies and asked if they would work for me (that’s what you do when you’re a really optimistic 15 year-old). A few of them were willing to commit, as long as I had work for them. I took that as my cue and posted an ad on Craigslist:

Young Men Willing to Work Hard

We’re a group of young guys who are looking to work this summer. We buck hay, cut firewood, do farm work, fences, tractor work, etc. We show up on time, don’t smoke or swear, and we work hard. 

Call Benjamin – xxx-xxx-xxxx

In hindsight, my ad could’ve been written differently, but that’s another conversation.

Within a few hours, I got a phone call from a lady who owned a farm down the road; she needed some fence built and some hay stacked. Then another call. By the end of the day, I had several people call asking when we would be available. (I later learned that this was my first lesson in scheduling and over-booking.) By the end of the week, we had a good start toward a week of work for the few guys that had opted-in.

I kept the ad live, and the calls kept coming in. It was funny to watch the nature of the farming business; if it rained, the phone was silent. If we had a few days of sun where the farmer could get some hay put up, the phone was ringing off the hook (one time, after a particularly crazy scheduling fiasco, I lamented to my dad that I had made 48 phone calls that day).

As with the growth of any venture, I had to scramble to get more work for the guys I had promised work for. Once I got more work, I had to rage around trying to find more guys so I could keep those promises too. I was up early and I stayed up late. I worked my head off to schedule things in, move guys around, and get myself out to the jobs as much as I could (Many of us, including myself, were under driving age, which served as a huge barrier to getting the work done. I might have three guys available, but they all needed a ride, so I’d have to find someone else who could act as their chauffeur. Thanks, Mom!).

All of this was a good adventure for a bunch of young guys to be on, and it kept us out of trouble. But, after all the scrambling, I still felt a little funny. I felt like I was getting short-changed (a feeling most business owners feel as some point!). Then someone graciously pointed out my problem: My accounts payable and accounts receivable matched perfectly. My ‘business’ got paid $10 an hour for every hour that myself or one of my employees worked. What actually happened is, at the end of the day, the farmer would whip out a fat roll of cash (farmers always seemed to have really fat rolls of cash in their pockets) and pay up each guy. At $10 an hour, the math was easy. What wasn’t adding up was that I was only getting paid for billable hours, and all my buddies were making the same as I was!

Eventually, it started to rain and hay season drew to a close. I took the ad down and did some thinking about how I had burnt myself out by not charging for the value I added. I got smarter and decided to take a different approach next time.

I get a weekly newsletter from Brennan Dunn, a writer and consultant geared toward helping freelancers raise their rates. (Some poking around on his site will turn up some great articles, podcasts, and even some free courses on how to raise your rates by providing more value). He’s been a sweet resource when it comes to pricing structure.

If I were to start a hay bucking business today, I’d change a few things up on how I charge. I would:

  • figure out how to better convey the value of having non-smoking, non-swearing, non-drinking guys working on your farm
  • look at other options of how to charge (something other than the typical by-the-hour route like bid by-the-job or a per-bale price)
  • spend more time ensuring I could deliver on the promises I was making to build trust

In short, I flopped it as a 15 year-old. But what I learned about charging for value provided is something I wouldn’t trade for all the free hours I worked back then. And if you can apply this to your work and benefit, that makes it priceless (pardon the pun).

Have questions or a story of your own about pricing? Shoot an email or comment below!

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