Making Money is the Greatest Skill of All

It’s unavoidable. There is a never ending torrent of links that offer you yet another skill. Each one requires a major investment of your time and money. In this article, I’ll suggest a way you can choose the skill that will make you the most profit.

Vendors market applications or certifications. But what they package are sets of skills. That’s quite a challenge for them. Vendors must guess at which skills their huge number of customers will find most useful. After all, no two users have identical needs. That’s why vendors sometimes overload their products with dozens and dozens of features. The results? Detailed and complicated documentation and interfaces. Certifications are usually better focused. But there is still the need to transform the general into the specific.

As soon as you think of “skills” as “capabilities,” life becomes a great deal easier. Your clients only care about the products and services you deliver, not the skills you used to generate them. Everything you offer, from résumés, to cover letters, to interviewing and more are all capabilities your clients need to excel in their careers. You gave them value by comparing the tools they had when they came to you with the knowhows they needed to win that next job. In short, you filled their capabilities gap.

The same thing applies to your practice. The very first step is to determine what kind of clients you want to serve: your market. Mid-level managers, students, specific functional areas all need different products and services. Your market must drive your brand. What must you do to serve your particular clients very, very well? 

Set aside uninterrupted time to imagine your practice as the very best it could possibly be. Describe that in as much detail as you can muster. Few things help you focus better than to put your ideas in writing. When you’re done, put it away for a few days. Now look at your words again to be sure they work for you. 

Here is the key question: which competencies do you need that you either don’t have or aren’t working for you? Again, avoid thinking about skills. Think about capabilities.

Long ago, when Twitter (now X) came out I wondered if it offered value to my executive clients. So I focused my question this way: Which enhanced job searching capabilities will Twitter allow my executive clients to use that they can’t get anywhere else?

I searched for the experts. I went beyond reading Twitter’s marketing and sales material. While it described capabilities, I needed a more balanced view. I googled all the books I could find about Twitter. The tables of contents and the indices showed me which ideas the authors thought most powerful. The authors’ backgrounds determine their credibility.

I talked with authors. I studied the books they wrote. It didn’t take long to find which Twitter capabilities would work best for my clients and why. Those competences translated into value. And the value drove my marketing and the products and services delivered to my clients. It also gave me a return on investment I got by using that new knowledge to serve my clients better. 

You can employ the same approach to great advantage when it comes to certifications. You ask the very same question of the provider: What will I be able to do once I have the certification that I couldn’t do before I earned it? How much will this certification cost? 

That number goes far beyond the registration fee. Certifications require your time. For the word “time” read “billable hours.” Your new certification will burn up more time because it will be part of the new content you post on social media. But there’s even more. It will take more time to educate your clients on the wisdom you mastered in the certification.

You must do the math. Your detailed business plan (I sincerely hope you have one of those and it’s current) can tell you what’s your time is worth. You can get a quick estimate by looking at last year’s tax return. How much profit, not revenue, did you make last year? About how many hours did you spend running your practice? Divide the latter by the former and you’ll find out what you must do before your certification or application amortizes itself.

I hope this example will illustrate the process. The numbers you see are for illustration only and not recommendations.

Last year, your practice delivered $80,000 in profits. You worked 50 hours a week, but not every single week. There were holidays and vacation times. So you worked a total of 45 out of the 52 weeks in the year. That translates into 2,250 hours. You brought in $80,000 in profits or about $36 an hour. 

The certification you’re considering costs $795. You’ll have to work 22 more hours to cover that number. But you must cover the cost of time completing the course. In our example, the certification requires a total of 15 hours. And you think it will take about 30 hours to build the handouts for your clients, update your website, and do the initial postings. So you must invest a total of 22+30 or 52 hours. Your additional cost is $36 an hour for 52 hours or $1,872. Now the total is $1,872 + $795 or $2,667. 

Please don’t be put off by that number. Let’s put it in context. Your financial management software is ready to come to your rescue. It will tell you how many clients you served last year. And since you know the profit, you now have the profit per client. Let’s assume you served 50 clients. Each brought you $1,600 in profit. 

Finally you have the answer to this key question: how many new clients must I close to cover the complete cost of the certification or application? Just divide the total cost ($2,667) by the revenue per client ($1,600) to find you must bring in just two more clients to amortize your investment. You could probably do that in your sleep.

Now I’ll sharpen my first suggestion that you think of skills as opportunities. Consider skills in two ways: as value delivered to your client, and profits delivered to you.