Give Yourself a Bonus. You Deserve it!

As a full-time consultant/freelancer, I take the jobs I want, the jobs I can find, and the jobs that happen to come my way. This gives me a lot of flexibility in my work schedule at the sacrifice of a “full-time gig”. There are a lot of pros and cons to freelancing. As a lifestyle, I find it works for me. But as a business, most of my business is self-driven. Most entrepreneurs are very self-motivated and need nothing more than their intrinsic drive for success. However, I always find both intrinsic AND extrinsic bonus rewards is a powerful combination.

Deciding On a Bonus

Using an extrinsic reward for some extra motivation, I wanted to find something I could look forward to giving myself. Every business has some kind of “bonus” structure, so why not have my own? At Microsoft, it was annual bonus or stock awards. At PopCap, it was quarterly profit share. Being my own boss though, all the money I earn goes to me, so a cash-based reward isn’t really meaningful. I decided that my reward would be a splurge — a “big ticket” item that meets a “want” and not a “need”. In my case, I settled on coffee gear.

A large part of making the freelancing lifestyle work for me was cutting out all extraneous expenses. This included specialty coffee, which I replaced by grocery store coffee (but still Peet’s brand). Can you imagine going from owning and running a coffee shop to then drinking grocery store coffee (even if it was home-brewed)? Quite a stark experience but a sacrifice I was happy to make to minimize my finances until my business took off.

The key to why my coffee gear bonus reward is so effective for me is because it hits on several emotional factors:

• It’s concrete. I’m specific about deciding the reward. It’s not, “I’ll allow myself to buy coffee gear”. My reward last year was a very specific model espresso machine. This gives me something very concrete to “dream” about, to strive for, to lust after. Every time I did research on my espresso machine, I was even more motivated to hit my goal.
• It repays a sacrifice. Because coffee was a sacrifice I made for my business, it’s something that is strong “want” but one that I chose to give up. The business repaying that sacrifice in the form of filling that want is highly motivational.
• It has value beyond money. In my case, coffee gear has long-lasting value. It adds to the greater enjoyment of my coffee and that joy is something that I put back into my business and personal life.

A physical product might not be a reward for you.  Maybe your reward is vacation/trip to Hawaii. Planning your trip gives you that on-going motivation to hit your goal. Creating memories during your vacation will surely prove to be more valuable than the actual expense of the trip itself.

Other reward ideas:

• A big ticket item you’ve been window shopping for
• A vacation or trip
• An outing (e.g. a Broadway show and fancy dinner)
• Pampering yourself (e.g. a spa trip or massage)
• A new puppy!

Some factors to consider when you choose your reward:

• You gotta really want it. This should be something you won’t get for yourself otherwise. So you can truly look forward to it. The whole point of your reward is to be a motivator, so it needs to be something that hits on a strong want of yours.
• Value. The cost or value of your reward should be commensurate with the goal you need to reach to gift yourself that reward.  In short, your reward has to be worth the effort to meet the goal. It’s human nature to feel less motivated if the bar for attaining that reward is unrealistic or exceedingly high relative to what you’re going to get in return.

Setting a Bonus Reward Structure

From the very start of my full-time freelancing career, I implemented a bonus structure for myself. At the beginning of the year, I set a revenue goal and determined the reward for reaching that revenue goal. I start with thinking about what I want — dreaming modestly big. I make sure it’s an item that clearly I can live without and wouldn’t buy for myself otherwise. Then I think about my business goals and properly adjust my revenue goal to achieve that reward.

The keys to making this work are:

• Set a measurable goal or benchmark to hit. In my case, I used revenue as a goal marker. If I hit “X” dollars in revenue, then I would buy myself “Y” reward. For you, it might be other factors — number of clients, number of projects, etc.
• Be realistic. The goal has to be attainable. When you achieve your goal, there’s satisfaction in it and the reward is your icing on your cupcake. If the goal is too easy, it doesn’t feel quite as satisfying when you hit that goal. However, setting unrealistic expectations, sets you up for disappointment. The goal of this structure is to motivate yourself to ever-increasing milestones to take your business to the next level. When you hit these stepping stones, it serves as motivation and momentum to keep moving forward.If you want to try to push yourself further, give yourself stretch goals. Like a Kickstarter campaign, you can set different levels of goals and rewards.
• Decide on a schedule that’s psychologically helpful. For example, if your business is seasonal and you know there are tough months out of the year, setting a goal that pays out during that time may give you some extra motivation and positive energy to buoy you through those tough months.
• Failure is not an option. It’s possible to structure your reward/bonus structure so it isn’t a question of whether or not you’ll reward yourself just a matter of “when”.  For example, if you’re selling a new product, maybe you have a sales goal of 50 units. It could take you a week, it could take several months, but you’ll reach that goal eventually. This is ideal in the beginning stages of your business because it keeps you working towards that milestone and there’s no negative feels of not meeting your goal.

Be Honest With Yourself

At the end of the day, setting extrinsic rewards is just a tool to keep you motivated, keep you positive, keep your business moving forward, and keep good energy rolling back into your business and your life in general. It only works if you stick to the rules. You only reward yourself if you meet the goal you set for yourself. You set goals that really do push your business forward.

 

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DISCLAIMER: The information and advice I offer on this site are 100% from my own experience, understanding and independent research. I encourage you to do your own research, form your own opinions and practice your own strategies. Please share what works with the community.