Risk...Reality or Perception?
How much are you willing to risk in order to be successful? The answer should be EVERYTHING!
Yesterday I did sound reinforcement for my local chamber of commerce for a seminar by a gentlemen named of Bob Clement.
He was speaking to the group of business owners about customer retention and ways to keep your customers and keep them selling you to others.
The portion that really caught my attention was when he spoke about successful business owners must take a risk in order to learn, grow and be really successful.
Here is an example that he gave....
He asked a member of the group to pull out a quarter, flip it in the air, catch it and palm it on the table top without looking at the coin. No one knew weather it landed heads up or down.
He then made an offer to the group.
Will you be willing to bet with him on the outcome of the flip? He would pay you $100,000 if it landed tails up but you would have to pay him $1000.00 if it landed heads up.
Raise you hand if you would take this bet! Myself and only one other person were willing to make that bet.
Will you be willing to bet with him on the outcome of the flip? He would pay you $10,000 if it landed tails up but you would have to pay him $100.00 if it landed heads up.
Raise you hand if you would take this bet! Myself and three people were willing to take that bet.
He then asked the group, who would be willing to bet on the coin flip if he paid you $1000.00 if it landed tails up but you would have to pay him $10.00 if it landed heads up.
Raise your hands if you would take this bet! The number of hands raised increased greatly.
He then asked the group who would be willing to bet on the coin flip if he paid you $100.00 if it landed tails up but you would have to pay him $1.00 if it landed heads up.
Every hand in the place went up!
He asked the group why so many were willing to take that bet but not the others? The response from the group was "less risk" of losing their money.
He then pointed out that the risk never changed....The risk was always 50/50 a fifty percent chance you would win, a fifty percent chance you would loose.
The amount of the pay off was always (x) 100
Loss --- Winnings
$1.00 --- $100.00
$10.00 --- $1000.00
$100.00 --- $10,000.00
$1000.00 --- $100,000.00
The risk was not a reality but in fact a perception. The group was basing their Risk not of the payoff but instead on the amount of their loss. A successful business person will base their risk perception on the WINNINGS and not the LOSS.
Yes, you could of lost $1000.00 but at 50/50 you also could of won $100,000.000. The chance (risk) is the exact same.
Now lets apply this to your DJ business.
Lets say you are a DJ who also holds a full time day job and DJ on the weekends. You don't rely on your DJ business as a means of a living, health insurance, paying your mortgage or other bills but more as an extra fun job that brings in some "extra" money for fun and excitement.
Almost every DJ that falls into this category charges an "average" to low or even lower price then the other DJs in their area and are much lower then those DJs who do this full time and charges a premium price (1 1/2, 2 to 3 times the "average" rate)
These are the DJs who say (complain) that they can't charge the same rate as those premium DJ rates because of the other "average" DJs or because of their location or economic situation of the area they reside in.
They believe that it is too much of a risk to charge the higher rate. They think they will lose to much of the business to lower priced DJs. They believe that they will risk not being able to book events at the higher rate. They are concentrating on the possible loss 50% and not the possible gain 50%
This risk is ALL perception and not based on any reality. Here is why.....
Right now they are working the DJ job as more of an extra side gig and not their means of making a living. If the business should begin to lose clients based on their price, they still have the full time job still providing them with everything they need. No real loss evolved except the meager earnings of "extra" cash they were making and the loss of time away from their family & friends by not working.
If the raise in rates works, then they will now be making considerably more money then they were prior to the change for doing the same thing they were doing before the increase.
The risk was all perception....no real loss evolved but the chance of possibly making a means of a living by being a DJ has increased greatly if it worked.
The reality of it all is that those DJs who do this as a side or extra job should be charging as much or even more then the DJs who do this as a living because they have very little to no REAL loss evolved. After all it's just for FUN!
Jeff Richards
http://www.PartyTimeProductions.biz