Often when I have a new client join me, one of the first discussions is fees. Whether this is for my law firm or my strategy firm. Of course, I’m not as surprised when people ask about my fees for speaking and this is perfectly appropriate. If a client is going to hire you, they need to know what their expenses or fees are going to be. This is great for getting a fundamental understanding, laying a foundation of trust and success, and moving things forward.
One thing that typically comes up is hourly fees. How much per hour is this going to cost? That’s usually more on the service side than the speaking side. Speaking is known to be a rate-per-product. In the professional services, hourly rates come up, and clients start asking, “Well, how much per hour, and can you adjust that rate?” Early on, in my law firm, which pre-dated my strategy firm, I would be tempted to negotiate these fees. Now I no longer do, and why? What can we all learn from this?
It used to be that I needed work, and I was somewhat flexible. If a client came in, I would be willing to charge less per hour to have the work, but now as my business is built and I’ve been involved in multiple activities. I know the value of my time. In fact, I know the highest value added use of my time is not selling my hours. When I set my hours, I should be very careful. I want to be able to work with clients, and I do want people to have access to me. But I must make sure that the rates reflect what the value of that time is. The value of the time is very high because it presents an opportunity cost. It keeps me from being able to do other things, so I’m very strict on my fees. I make sure that I have those set, everybody knows what they are and what they charge. It encourages clients to use other members of my team and not myself, and it keeps my time free for other value-added activities. That’s why I don’t negotiate my fees.
If you’re a business owner, that also has a component of selling your time; I recommend that you don’t settle or negotiate your fees either. Understand what your value added is and understand how it fits your overall business structure in order to stay connected to what those fees are.
What’s been your experience with this? Have you negotiated fees in the past? What will you do differently in the future?
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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Freeimages.com/photographer lourdes mora.
About the Author
R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.