One of my favorite things about being self-employed is having more freedom and flexibility. I’ve realized that there is quite a difference in being self-employed and being a business owner and I feel like I’m stuck in between.
When you’re self-employed, you generally work as a sole proprietor or independent contractor. You do most of the work by yourself while as a business owner, you hire a team of contractors or employees and delegate tasks.
Whether you consider yourself a business owner or someone who’s self-employed doesn’t matter as much as how you make your money does.
Working for yourself provides a variety of freedoms and choices, but you have to change your mindset from employee to boss. This also means changing how you get paid.
Most times, employees get paid for their time while business owners get paid based on results. Here’s why you might want to choose the latter.
It’s What the Rich People Do
According to the book Secrets of the Millionaire Mind written by T. Harv Eker, rich people separate themselves from the average Joe by choosing to get paid based on results they’re able to produce and not just the time they put in.
Rich people usually have a business and earn an income from their profits. Their income isn’t always directly tied to how much work they put in. Instead, it’s tied to commissions or percentages of revenue.
This may sound different or risky to some but it’s worked for tons of current millionaires so they have to be doing something right.
Your Income Becomes Unlimited
Getting paid based on results can lead you to make way more money than people who are paid based on time. When you think about it, time is a limited resource. There are only so many hours in a day. So if you are paid based on the numbers of hours you work, your income will be extremely limited.
If you start getting paid based on the results you’re able to generate, all you have to do is perform and make as much money as you want.
This is how some business owners are able to make 5 or 6-figures in one month. If they were paid based on time, they’d have to have a super high rate just to earn that much money.
But when you’re adding value and getting results for your clients and customers you’re improving their lives and also they’re cash flow so they’re able to pay you more in less time.
It’s More Sustainable
Believe it or not, getting paid based on results can be more sustainable than getting paid based on your time. Sure, your income may fluctuate if you earn commissions or have a high or low sales month. However, your income will depend on your value and not your time.
If you’re just exchanging time for money, clients can easily drop your service and hire someone else. If you are providing them with a ton of value and getting them results, it makes it harder for them to give up working with you.
Would you want to stop working with someone who’s making you a lot of money?
Finally, one of the biggest perks of getting paid based on results and not time is that you can work less and still make more money. Since time is a valuable resource we can’t get back, it’s important to free up as much time as possible while still being productive.
If you’re getting paid hourly or salary, it’s nearly impossible to work fewer hours and still make enough money.
If you’re good at what you do and can set your business up to get paid based on results, you can become more efficient to get those results for clients and customers while working fewer hours.
What could you do with the extra time you’d gain from switching the payment structure of your business?