CHAPTER 9
Setting Fees for Everything Else: How to Make Money While You Sleep, Eat, Play, and Make Money Elsewhere

I'm always surprised at how stupid I was two weeks ago. Once upon a time, I would have said “two years ago.” I like to think that today's shorter time frame is not so much a sign of my increasing dementia as it is one of exploding opportunities in this profession. (A speaking buddy of mine, Joe Calloway, told me he wants to call his original clients and just cry, “I'm sorry for that nutty advice I gave you years ago, but it was the best I had at the time! I want to return your money!” I'm with him until that last sentence.)

There is nothing wrong with the position that holds that one is a consultant and not interested in the peripheral and tangential activities that may distract one from the work at hand. Fair enough. But if you're at all like me and you believe that consulting is simply an input to a much greater end—our lives, loved ones, and legacy—then why not explore the myriad opportunities that a successful consulting practice can generate?1

Remember, wealth is about discretionary time. Money is important because it is the prime determinant of discretionary time.

Basically, there are a lot of ways to make money in the profession, but like the nature of our consulting fees, there are also a lot of ways to charge incorrectly and shortchange ourselves in terms of receiving fair compensation for our value. It's not unusual for a consultant in my coaching communities to ask whether he or she has a right to charge a high fee for speaking to an organization that has been attracted to him by a book he or she has published. “After all, “they can get most of this out of the book, so I don't think I'm bringing much extra value.”

If that's what you believe, then you're right.

If you're of the “pure” consulting philosophy, you might want to skip this chapter. On the other hand, you might want to read on and see what you're missing. And if you're a big believer in maximizing your income, especially in non-labor-intensive pursuits, then pick up your highlighter.

KEYNOTE SPEAKING: DON'T CHARGE FOR YOUR SPOKEN WORDS

The intent of this discussion is to provide help in how to set fees for speaking activities. If you're interested in how to begin a professional speaking career, or how to craft a speech and get onto the lucrative speaking circuit, see my book Million Dollar Speaking.

A keynote speech is usually 45 to 90 minutes in length. It is ordinarily a general session (plenary) speech, delivered to the full assembly and not to concurrent sessions or breakout groups. Technically, only the opening speech is the keynote speech (sounding the “key note” for the conference); the others are plenary speeches delivered during the course of the conference. When people say they are delivering the “closing keynote,” well, that horse has long since left the barn.

The least expensive speakers delivering keynote speeches are paid about $3,500 by major trade associations and large organizations, and the most expensive are paid from $75,000 to $200,000. These latter people have included Colin Powell, Norman Schwarzkopf, Bill Clinton, and star athletes and coaches.2 The typical highly regarded noncelebrity keynote speaker is paid between $20,000 and $40,000 at this writing.

At the lower end of that scale, speaking just once a month generates over $200,000 a year of what is essentially pure profit. Speaking twice a month at the higher end yields nearly a million bucks. Do I have your attention?

There are also more traditional training opportunities, which may involve concurrent sessions, workshops, and so on and may take several hours or several days. I favor keynotes, since they are the least labor-intensive and command the highest fees, but longer training sessions are also viable options for any consultant.

In terms of your fees, I think there are three main considerations.

Factor 1: Establish Your Value

Your materials, web site, conversations, and other promotional efforts should focus on value—not on topic, not on delivery, and not on methodology. Recall the value package concept from Chapter 3 (repeated here in Figure 9.1).

Your speaking approach must accentuate the client's future. The more of your past that is relevant, unique, interesting, and attractive, the more you can potentially contribute to the client's future. The intervention—the speech—is merely the transfer point.

If you can keep this process in mind, you'll have no reluctance charging for your worth. If you concentrate solely on the nature of your intervention (a speech, workshop, seminar, or training session), you'll constantly wonder how you can charge more than a modest amount. And you'd be correct.

An illustration of Transforming Consultant Past to Client Future.

Figure 9.1 Transforming Consultant Past to Client Future

Be crystal clear on the value you provide in your speeches. Educate the prospect. Do you help improve sales, increase retention, assimilate culture changes, enhance customer service, develop strategies for growth, or foster teamwork? Those are certainly more valuable objectives than “providing a speech” or “helping motivation.”3

A perfectly fine speech can be crafted based on your consulting experiences, challenges, and results.

Factor 2: Develop Options

The “choice of yeses” extends to professional speaking. For example, I can turn virtually any keynote speech into a solid five-figure assignment by providing options to the buyer such as these (I've made up the numbers just to provide a comparison):

  • Deliver the keynote according to the buyer's objectives: $15,000
  • Talk to selected participants first by phone to include their observations in the remarks and customize my approach to their issues: $3,500
  • Talk to the division executives (corporate officers, board of directors, trustees, others) to include their views, remarks, and further tailor the presentation: $3,500
  • Conduct a brief survey to compare industry practices to the client's practices and highlight the distinctions: $5,000
  • Appear at subsequent workout sessions with smaller groups to respond to their questions and interpret the keynote remarks down to operational concerns: $2,500
  • Provide a copy of my book (tape, other product) for every participant to bridge the remarks and their application: $1,000
  • Create a page (with pass code) on my web site just for attendees: $2,500
  • Provide a recording via a link of the speech to all participants: $1,000 (for 100 people)
  • E-mail coaching of selected participants for up to 90 days: $7,500

You might create more and better options. But these alone add up to over $40,000 alone. Any combination will land you somewhere in the teens or twenties or thirties. And since you're a consultant to begin with, you can provide and complete these options much better than a pure speaker, who does nothing else for a living. In other words, the options allow you to build on your innate strength.

Most speakers will not offer these options. Some buyers will tell you they can't afford them. So what? This is a sideline for you, and one that you can embark on within your own parameters. And you'd be silly not to build on the very value that you bring to the equation.

Factor 3: Use Speakers Bureaus Only on Your Terms

Bureaus are brokers between the client and the talent (you) for which they expect 25 percent of the deal (some want 30 percent and more, indicating that there are still a lot of people who don't connect fees and value). Bureaus can be highly effective, since they bring business you would not ordinarily have acquired, and your own marketing cost is nil. However, they can be deadly and dangerous for consultants.

Bureaus will want a “fee schedule.” For example, your keynote fee may be $7,500, your half-day fee may be $9,000, and your full-day fee may be $12,000. This is what bureaus market. That's okay if they allow you to negotiate further with the client, providing options as I've suggested. But many bureaus won't allow you to do that out of a general paranoia, and your fee would be restricted to the $7,500 less the 25 percent commission, or $5,625 net. That means that the annual revenue from speaking just once a month drops to $67,500—still a decent figure, but considerably less than the $90,000 it might otherwise have been.

PRODUCTS

One of the biggest errors I made when I first published Million Dollar Consulting in 1992 was to advise that products should wait until the consultant has a firmly established reputation. Actually, products can help branding and the creation of that reputation.

However, since I'm talking here primarily to successful consultants, products are an important part of the repertoire in any case. And they possess the wonderful attribute of providing income while also promoting your consulting.

Here is a brief description of some of the product options available to successful, innovative, and aggressive consultants.

Commercially Published Books

You can buy your books at a discount not from the publisher (who offers about 40 percent off) but rather from one of the book wholesalers, such as Ingram.4 In this way, you can qualify for more than 40 percent off, get another 2 percent off for prompt payment, and generate royalties for yourself (since the wholesaler buys from your publisher). If your hard-cover book retails for $30, you can net $12 to $15 on your own sales using this route. (Always sell at full retail yourself.)

Self-Published Books

This is where the serious money resides, but two factors are absolutely critical: First, the book must be great. Most self-published books are terrible, and they look as though they were produced by someone who can't even use a computer properly. Second, they should be expensive, not inexpensive. While I have some booklets that sell for $7, they are also used as free marketing vehicles when necessary. However, my large margins come from books that sell for $75 to $150. Value-based pricing can apply to books (as you've probably understood when paying for one of those large, gaudy “coffee table” editions). You can self-publish a hard-cover book with an initial print run of 2,000 copies for about $8,000, and subsequent press runs will cost about half that. That means that you're making about $25 on a $30 book. You're better off with low volume and a high margin than with high volume and a low margin, since you're not in the book fulfillment business. Amazon and others offer high-quality publishing, which includes graphics, ISBN numbers, indexing, and so forth.

Other Stuff

Focus on high-margin, relevant materials. I've actually seen consultants sell all kinds of tchotchkes, such as T-shirts, coffee mugs, bumper stickers, paperweights, and assorted dust collectors (although professional speakers are far more prone toward this nonsense than professional consultants). However, even items such as calendars, daily planners, and project templates are suspect, because they don't command high prices and are generally not terribly practical. If you have manuals, templates, worksheets, and related guides, which have an intrinsic and immediate application, these can be valuable products. For example, a brief pamphlet or set of instructions on behavioral interviewing, assessing recommendations, rebutting the most common objections, or using PowerPoint might be very well received among the appropriate client groups.

There are at least seven questions regarding potential products for sale that should always be answered in the affirmative before you proceed:

  1. Is there sufficient margin per sale?
  2. Can I sell this product to both existing clients and nonclients?
  3. Will this product reinforce my marketing plan?
  4. Can I create this product cost-effectively and kill it cost-effectively if it proves to sell poorly?
  5. Can I fulfill orders expeditiously and efficiently?
  6. Will this product remain relevant and timely for at least a few years?

If you're selling products, accept credit cards and plan for lost shipments as a cost of doing business. Use an International Standard Book Number (ISBN)5 so that you can distribute via Amazon.com, other web sources, bookstores, and other retail outlets. Create a separate secure and user-friendly section of your web site just for product sales.

I suggest you do not use PayPal, which is rather amateurish, but go to your merchant bank and secure Visa and MasterCard virtual terminals. You can then contact American Express and add them.

EXPLORING NEW LUCRATIVE FIELDS

You've heard me say before that there are a lot of ways to make money. I just never imagined how many there were. Actually, we're presented with them almost every day, but we fail to set fees for them for a variety of reasons:

  • We don't take the time to recognize their intrinsic worth.
  • They're things we do “naturally” and unthinkingly.
  • The positioning is wrong.
  • We assume that a fee is our only source of remuneration.

I've never written about these elements before because they best apply to mature, successful consultants whose name, brand, stature, and positioning have created a powerful attraction. Like a bank loan that becomes available only once you're so successful you don't need it or a speakers bureau that wants to represent you only after you've made a name for yourself on the speaking circuit, these alternative sources of income arise when you're already doing well financially.

However, you're still willing to accept the bank's line of credit and the speakers bureau's business, so why not embrace new sources of income that can provide for retirement, kids' college tuition, vacations, charitable donations, or simply discretionary income?

Remote consulting can take various forms; let's look at three of them.

Coaching

Coaching is designed for managers and professionals working for organizations and for independent entrepreneurs. They usually require help with a single issue, although sometimes they are seeking longer-term career advice.

My suggestion is that you provide coaching help for set intervals (for example, 30-day periods) during which the individual can phone, Skype, Zoom, or e-mail you. Meetings are never in person. Phone calls are at mutually convenient times or on the basis of your returning the call within some satisfactory time frame (for example, 24 hours or less). You might choose to limit contact to no more than one phone call a week or some other standard if you wish (or provide options at different fee levels). You assess a fee for the time interval, rather than each transaction, so that the individual has in fact “retained” you for a limited duration and with certain restraints.

I've promoted the coaching option on my web site so that I could refer people to it easily without long discussion. Payment is always in advance. If you were to charge even $2,500 for a 30-day interval and had three people being coached a month, that's $90,000 of pure profit annually derived during your “down time” that can pay the mortgage on a vacation home or tuition at a fine school. Of course, if you were to charge $5,000 and averaged four coaching clients a month, your annual profit would be $240,000, which could pay for your home mortgage and send two kids to college and provide for a vacation or two.

Mentoring

I define mentoring as providing rather intimate, one-on-one assistance to other entrepreneurs. (If you were an actuary, it would be for other actuaries, or if you were a pottery maker, for other pottery makers. There has actually been a farrier in my mentoring program who has mentored other farriers.)

You might find that coaching and mentoring are similar or identical, and that's fine. But I've made the separation for the purposes of differentiating my services and assigning proper fees for the value provided.

As you've become more and more successful, greater numbers of people come to you for advice. Sometimes you see yourself as “giving back to the profession,” sometimes as doing a good deed, sometimes as harried, and sometimes as unfairly imposed on (see the preceding case study). No matter how great our ego, the luster of being sought out as a “star” begins to dim when people insist on free advice and intrude on our time.

Hence: mentoring. Many executive coaches have set up coaching “certification” programs. I've seen facilitators do the same, as have people in quality control, expert witnessing, and technology consulting. I've tried to create a broad program to encompass entrepreneurs of all kinds, but about 75 percent of the participants have been consultants of one stripe or another.6

I also believe that mentoring takes place over a longer period of time (my program is six months). You can charge a considerable amount of money for your remote involvement, which the participants nevertheless consider a bargain. I've tried to structure my fees so that they can be charged on a credit card and so that the client can recover them easily through higher fees or additional business so as to recoup the expense fairly quickly.

My particular program requires an investment of $3,500 to $9,500, payable at the outset (and more sophisticated and more expensive versions of the program have emerged) and is implemented by “Master Mentors” who have been mentored by me themselves. That's an extremely reasonable fee for my kind of high-powered help, and it hasn't been unusual for participants (who are at every level of the profession, some just beginning and some already earning in the high-six- to low-seven-figure range) to double and triple their income.

You may choose to mentor one or two people at a time or a dozen at a time, depending on your own objectives and work schedule. But since this is truly remote consulting, you can always return a mentor's call or e-mail from the road. At this writing, more than 800 people have been through my program at $3,500 each; about 30 percent have reenrolled between one and 10 times; and another 100 people have been through either my guided program at $6,500 or my total immersion program for $9,500. These are fees I've kept constant from inception in 1996 or whenever the newer programs were introduced. I'm sure some of you are doing the math at this point.7

(And as of this writing, about 200 people have been through my elite KAATN [Kick Ass and Take Names] coaching at $17,000 each.)

Situational Consulting

I've been called by people for a long time who have an immediate and urgent need for help on a very clear and well-defined issue. They don't need coaching, and they don't need mentoring. They just need some quick answers.

I used to do this for free, but I came to resent it. After all, I was helping people make hundreds of thousands of dollars, avoid legal problems, attract new clients, and improve their image, and often as not, they were calling on my toll-free number!

I now tell people that I can't do justice to their issue with a quick response to a rapidly stated quandary. I explain that there's a modest fee of $2,500, in return for which we spend up to an hour on the phone (cumulatively) and exchange unlimited e-mail for up to five business days.

AND NOW FOR SOME PERSPECTIVE

I'm not saying that you should abandon all pro bono work or refuse to offer free assistance to anyone you please. I am saying that there's no need to give away the store, that success does not demand self-immolation, and that people realize that there is no free lunch. Or at least they should realize that, and we can help them. I speak at least a dozen times a year for free to professional trade association chapters in my profession.

You may choose not to take a personal fee but to suggest other forms of remuneration. Here are some alternatives that I use:

  • Make out the check to a favorite charity or cause.
  • Provide a favorable review of one of your books to be posted online.
  • Volunteer for a cause you are leading or backing.
  • Return the favor with referral business.
  • Return the favor by helping with some tedious work.
  • Participate in a sample taping you're doing for a product.
  • Promise to help another person develop business, skills, or marketing when he or she is ready.
  • With permission, use the opportunity to test new material and approaches.

I'm not mercenary, but I am pragmatic. I've found that most people who seek and accept free advice seldom put a premium on it and rarely fully implement it. They know that if they screw up or need further help, there's always more to be had at the original price.

Consequently, I can make a case that you're helping people more when you require that they invest—no matter how modestly—in their own success and take some accountability for implementing your help. There's nothing like paying money to force someone to analyze the return on that investment!

When we are successful, it's too easy to enable others who simply want the “shortcut” version of our success without the hard work, the dues, and the discipline. I tell people all the time that I can't control their discipline or their talent. I've found that those who want things for free usually can't control those factors either.

One more criterion: When you are doing work that you dislike and wonder how you got “roped into it,” it's time to start charging. Just as you're justified to charge more for difficult and fractious clients, you're certainly justified to charge for previously free work that is now driving you nuts. If the other party refuses to pay, you have ample cause to walk away. I've had to tell too many people in my life that I was helping them out of my good nature and that I didn't expect argument and debate as a result. (The people who tend to complain most bitterly in the aftermath of elections are ineluctably those who didn't bother to vote.)

There are a lot of ways to make money. You may not choose to make money doing all of them, but you owe it to yourself to at least examine them in terms of your overall life goals and business objectives. You could probably, right now, be making another $100,000 to $500,000 on your bottom line if you intelligently engaged in nonconsulting activities and remote consulting.

CHAPTER ROI

  • There are a lot of ways to make money, whether for yourself or for a cause or charity that is important to you.
  • In addition, charging fees for nonconsulting services often provides the relief needed from those who constantly bang on your door wanting your expertise for free.
  • Speaking is a primary money generator in addition to being a wonderful marketing tool. For those interested, it can be a second profession and a very lucrative source of income. But fees here, too, should be based on value and assigned over options. Training and workshops are allied endeavors.
  • Products provide wonderful passive income, as well as additional branding. They also yield excellent marketing advantages.
  • Nonconsulting services and remote consulting provide as much or as little opportunity as you care to pursue. Their great power is in generating income during “down time” without travel, wear, and tear. The probability is that you're already doing a great deal of this for free, which is fine if it's a conscious choice but deadly if it's a “necessary evil.”
  • Diversifying your income also provides flexibility to weather economic ups and downs, client defections, and your own wish to decrease labor intensity.
  • The bottom line: even a modest amount of nonconsulting income can make a tremendous impact on your life goals.

Passive and remote income will keep you off airplanes and remove the burden on your retirement planning. This is because it tends to be an annuity that persists long after you elect to reduce your activities. In the trajectory of your career, you should be implementing passive income opportunities now.

NOTES

  1. 1.   See my book Legacy: Life Is Not a Search for Meaning but the Creation of Meaning (Taylor & Francis, 2021).
  2. 2.   I believe that the unofficial record was set by former President George H. W. Bush, who in exchange for delivering a speech in Tokyo accepted stock options that subsequently generated several million dollars for about an hour's work.
  3. 3.   In fact, “motivational speakers” have a justly deserved poor reputation for much froth and little substance. We had all better be motivational in our talks, but we had all better be providing solid techniques for improvement as well.
  4. 4.   Ingram Book Company, https://www.ingramcontent.com/publishers/distribution/wholesale.
  5. 5.   You can apply for an ISBN number through W. W. Bowker at http://www.bowker.com/products/ISBN-US.html.
  6. 6.   I actually now hold an annual mentor summit, open to all present and past participants in the program. It's averaged more than 70 people per meeting, all of whom pay their own expenses.
  7. 7.   People ask how I arrived at $3,500. At the time, it was the monthly payment on my Ferrari. I figured that a dozen mentorees a year would pay for the car. Today, my Bentley costs $4,500, but I've held the original price on the mentor program because I'm a sentimental guy.
..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset
3.21.163.161