What if the people I most want to help are broke?

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There are three main criteria of a viable target market.

First, it needs to be clear. I should know immediately if I’m in that group or not.

Second, we need to be able to find them. There should be hubs.

Third, there need to be enough of them who can afford to pay you full price.

Ah.

That third one.

What if the people you most want to help don’t have much money?

If that’s true, hand over my heart, what you have is a non-profit. I suggest you legally structure yourself as such and generate your salary through fundraising. Stop making yourself and your clients suffer by pressuring yourself and them to pay you with money they don’t have.

But what if there might be more possibilities here?

They’re broke.

There’s a big question as to whether or not that’s true.

Sometimes it’s not that they don’t have money but that your marketing is terrible and they don’t see the value and you are terrified to talk to them about working with you and utterly collapse when a conversation about money comes up.

It really could be that.Or it might be that your current business model will never be profitable. It could be that too.

Or it might be that your current business model will never be profitable. It could be that too.

Years ago, I met with the good people running Green Enterprise Toronto, an independent, green business network that would, eventually, become Green Enterprise Ontario. I’m not sure it’s even still around now. But as I sat at their Spadina Street office in Toronto, they told me that their business model wasn’t working. They were trying to sustain themselves on dues from their members and it wasn’t nearly enough. They needed more money but their members weren’t able or willing to pay more. It wasn’t until they had a conversation with the Toronto City Council that headway was made. The City saw that G.E.T. was providing a service that properly should have been the domain of the city – supporting local businesses and so they were able to put some funding towards it. Without the funding from the city, that project would have utterly collapsed.

Edmonton had a similar group for years, Live Local, of which I was a founding board member. Same issue but, this time, the Edmonton City Council didn’t step up and the organization folded.

My friend Robindra, runsan incredible project called It’s Time to Bloom. They throw a weekend event for local yogis that has yoga classes and workshops, inspiring talks from big name speakers and sweet, classy dance parties.

Every year, it lost money.

“Did you make any money this year?” I asked him, full of hope that this might have been the year it turned around for him.

“We only lost about $5000 this year!”

Cities need more people like Robindra who do what they do for the love and not the money and bring such fine things in.

But he was stuck. He couldn’t raise ticket prices and he couldn’t guarantee that his events would sell out. It was always so close to the wire.

“I’m sorry to hear that man.” I said, commiserating with him.

“But we’ve got it figured out for next year!” he said.

My ears perked up.

“Festival grants!” he smiled. “We realized we’re a great fit for a lot of these grants and, with them, everyone can get paid and we don’t lose money.” He told me that they were also deepening their exploration of corporate sponsorship.

What he had on his hands was a social enterprise. His project was a mix of business and non-profit. It took him five years to see it. Some people never see it.

Now, with a different business model, they might not have needed grants. For example, if they came up with a ‘Bloom Yoga Teacher Training’ or a ‘Bloom School of Yogi Business’ or ‘Bloom Life Coaching Program for Yogis’ then maybe they could have afforded to lose on the big event if it was an effective marketing tool to fill their higher end programs.

If your people can’t afford to pay you what you need to sustain yourself then you have four options:

  1. Change nothing, try to get water from a stone and burn out in an ashen pit of poverty, bitterness and resentment.
  2. Drop that target market for a more profitable one and simply volunteer your time to help those people.
  3. Focus most of your efforts on a more profitable target market and give it to the people you most love at a discounted rate (e.g. gift economy, pay what you can, sliding scale or barter).
  4. Shift into a social enterprise or non-profit model and raise money through grants, sponsorship or individual giving.

Which option would you choose?

About Tad

  • Paula Boylan

    Great post. Clients often think they can’t afford the cost of results based effective help. Many of these same people don’t think twice about upgrading to the latest flat screen tv or iPhone. Focusing your marketing time on those who value what you offer and are willing and able to pay for it is sound advice. A percentage of the business can be pro bono but the majority must come from those who can and do pay for what you offer. Thanks Tad for cementing this concept…it’s one I struggle with.

  • Hari Ma

    hi Tad, I like that you also wrote, is it true they are broke? I was giving a lot of my clients concession rates for my therapy work and it was really impacting my ability to support myself, I knew something was wrong, I could feel it inside, it was nibbling away at my self worth. I used to just ask if people were fully employed or not, I struggled with charging even just the standard rate for my sessions, although I gave more time than some others in my field. I projected my own hardship paying for sessions onto my clients. Eventually I started asking questions about my clients financial situations, as courteously as I could. These are clients who really value my work, many who have come to me for a long time, and I discovered that some of them had felt for a long time that they should be paying the full price, but because of my own poverty consciousness, not being clear about my boundaries with concession prices, it had been too easy to just let it slip. I wasnt addressing it so neither were they. It became really clear that plenty of people who wern’t working, or were only working part time, had substantial savings, or if they were broke, their sessions were often being paid for by someone else, who was not short of cash. Im happy to say that since I started valuing myself more, and my clients are paying me correctly there is a much higher energy in my therapy space, and I am also attracting more work. This change has also allowed me to feel good about offering lower rates to those who really need it.
    I think its great that you have written this article, offering solutions/possibilites, and opened up the enquiry about how people can be paid for what they do.

  • caite

    Wow, this is wonderful Tad, and great timing for me! I want to get paid for my work with the Homeless, and it seems impossible so I’ve had to stop for awhile. You always seem to know what “we” are thinking! Much gratitude.

  • Thanks, Tad, for saying it like it is!
    The example of the annual event that was built out of love but then could apply for grants is really exciting to me.

    To corroborate your “option 4” at the end:

    I know someone running a social entrepreneurship startup incubator, and he shrugs at what many perceive to be a big difference between for- and not-for-profit. He tells those considering the non-profit route to still see themselves as “in business” in the following sense:

    Non-profits are in the business of “selling” good feelings and data about their work in the world that justify contributions …to whoever is supplying the money.

    Those whom you provide services ‘pay’ you in the form of their success, their testimonials, and anything else that sways those financing your effort, to keep doing so.

  • Nell Schroer

    Tad, I’d say that this is a story I tell myself and often time it eeks into my mindset + marketing + presentation of my services. I’m projecting this fear on my potential clients. So I’m working on that, and also open to learning new ways to structure my business. Thanks for the tips!