How to Negotiate Your Consulting Fee

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I know many of us have a business coach, or need one. But a coach is only worthwhile if they’re elite.

The coaches at Uncommon Elite are exactly that: they are former Special Operations (literally SEAL Team 6 alumni) and successful business leaders.

Think of it this way: these guys have led in combat and in business.

Business leaders should have them on their side as their personal coach

Hi there!

I was extremely nervous.

I had snuck out of my company’s office. I hid in a coffee shop a few blocks away. The hope was no one from work would see me there.

And if they did see me, I hoped they wouldn’t ask why I was on a Zoom call.

That was only part of why I was nervous.

I was most nervous about the Zoom call. It was a negotiation call to settle on a rate for an upcoming project.

This project was unique. It was my first one for a major private equity firm. So, I went into the negotiation a little desperate.

I quickly threw out a low number, and told the client “I could go lower if need be.”

The client, a nice guy named John, seemed confused but agreed. Here’s the actual invoice of that project: $2,750 for 22 hours of work.

About 18 months later, I was regularly charging $2,750 per day of consulting work.

The problem was I had negotiated against myself on that call with John. Negotiating client work is extremely difficult, and uncomfortable when you first get started.

I don’t want you to undercharge like I had. So, let’s talk about how you can negotiate client work

Here are my four best tips for negotiating solopreneur work

#1: Total Size, not hourly rate

Many clients will fixate on the hourly or daily rate. They might have $100/hour stuck in their head. You want $125. It’s a four week project

Here’s the trick: you can agree to their hourly rate if the project is longer.

Say this:

“That rate is a bit lower than I typically charge. I do discount rates, but only for longer projects due to the job security it provides me.

We previously talked about this project being approximately 4 weeks. What if we agree to $100/hour but structure the project as 6 weeks? That gives me a bit more project security and more time for us to ensure we knock this project out of the park & to address any follow-ups”

In my experience, clients tend to agree. You also just made more money too:

• $125/hour X 40 hours/week X 4 weeks = $20,000/project

• $100/hour X 40 hours/week X 6 weeks = $24,000/project

Think of this as losing the battle, but not the war. You might make less per hour, but you’ll make more in total.

Also, you’ll likely work fewer hours since you’ve got six weeks to do four weeks of work.

That will give you a better work-life balance, or it will give you more time to do multiple projects at once.

#2: Be the First

Anchoring is real. The psychological concept says we become focused on the first piece of information.

If you throw out the first number, you are the one to “set” the anchor.

Today, I always set the anchor.

#3: Be the Highest

One really cool byproduct of an unexpectedly large Twitter following is access to information.

Then, I turn around and share that information with you :)

For example: the highest-price pitch on a project is the most likely to win.

Seriously, if you ask for more money, you will get the project more frequently.

Price is a proxy for quality.

#4: Have Options

Let’s say you are close to finishing a project. You will have a capacity for a new client starting next week.

You should be talking to at least 3 potential clients. That gives you options, which will lower your nerves.

With just one potential client option, you’ll nervously discount the rate to ensure you win the project. With three options, you’ll more confidently negotiate.

How can I help?

If you reply to this email, it will come directly to me & I’ll respond early next week.

To head off a very common question: I’m sorry but I don’t have any quickstart guides, courses, communities, or other paid resources!

What would be most helpful to read about next week?

Let me know what would be most helpful for you :)

What am I up to these days?

This newsletter isn’t about me; it’s about you. However, I keep getting asked, so I’ve added this little section

Traditional consulting

My existing client is wrapping up at the end of July. This has been an interesting project and is slowing down in intensity now.

Skin-in-the-game consulting

This is a new consulting model where I work with a client as their advisor, but I also own a significant piece of equity in the business. I have “skin in the game” to ensure my clients succeed.

As of this week, I’ve joined Uncommon Elite as a partner If you can’t tell, I really love this business 🙂 I’m in talks with a few other businesses now

Real Estate

The cat’s out of the bag! Sean Sweeney is coming on board as an official advisor to Scholastic Capital.

I’ve invested a lot of my consulting profit into single-family homes in elite school districts. It’s been wildly successful for my wife and I.

So, we’re launching a small fund to scale this strategy!

If you are interested in following along, click here!