I Need To Know How To Hold ‘Em and When to Fold ‘Em

When you are selling your own services, one of the most difficult things to do is to set your own price.  When I work with entrepreneurial or emerging consultant clients, we typically go through an exercise to determine market value, cost of good/services, market share strategy and regional pricing tolerance (where applicable).  However, the after that data driven exercise, complaints start to creep up regarding reducing prices and “free/pro-bono” work eating up too much time without any return.  Here are five things to do to avoid losing your livelihood and your sanity. 

1. Find out early in the sales process what the client’s budget is.  You want to ask them a budget question before they ask you a price question. If their budget is in line, then proceed.  If it is not, then quickly let them know that their budget is below your standard pricing.
2. Help them afford you – if you are consulting to help a company save money, then you can structure your contract to be your full price but has two pay components.  A base price (their budget) plus the savings realized up to 5% over your standard fee with a guaranteed minimum (your fee).   If you are facilitating a workshop, you can structure the contract to be your full price which includes the base fee for the workshop plus X number of presold workbooks.  They can either gift the workbooks to their employees, or ask the employees to pay for workbooks to make up the budget gap.  The key is to keep each invoice at or above your market value. 
3. No free-bies unless there is WIFM value (What’s In-it For Me).  If you can garner exposure (verified in advance), marketing, a chance to sell other products, etc. then it is a good idea to do some “free-in exchange for” work.  But be cautious.  For some crazy reason, friends and family often assume you want to work for free.  What’s up with that?  You can politely but directly say “that is something do for clients, and my fees are X.  If that is not something you’re comfortable with, I completely understand and I’d be glad to point you in another direction.”   When was the last time you asked an attorney friend to review a contract for you for free or an architect friend to draw up some plans for your new beach house?  Hopefully never.
4. When you are asked (in case you don’t get that budget question in first) “what is your fee, say something.  Even if it is “what is your budget?’.  Anything is better than, “um” “well” or nothing.  That’s the first clue that you are flexible or will negotiate – i.e. talked down.  If you have a price and stick with it, you can at least say it confidently and work on the details of the project as the conversation progresses.
5. Hold your own.  Don’t change price based on pressure of the prospect.  If they indicate the price is too high, ask them why they feel that way.   Ask them what they were expecting and where they are getting their price base from.  You may learn that a competitor is charging less – and you may have to either explain how your services differ or be willing to match price.  At some point if there is a competitive pricing issue you have to decide if you want to “compete” on a price, quality, or product differentiation.  Or, you may decide that you don’t want to compete and fold ‘em and move on to the next opportunity.    

I Need to Know What I’m Doing

Doesn’t it seem as though each year goes by faster?  We know that’s actually not the case, but it sure feels like it.  Since our strategies, technology and clients are more complex, our pace has increased significantly over the past ten plus years.  You know the old adage “time flies where you’re having fun”.  Unfortunately with the complexity of the world we live in today, we cannot let our days, weeks, and months be managed by chance .  It will not be fun and we will find ourselves a year further along in the same place – not where we want to be. 

Whether you are running a multi-billion dollar company or starting out on your own, your long-term success will depend on two things – each year redefining specifically where you want your company to grow in the next 12 – 36 months and making sure the activities (aka work) of you and your team not only perpetuate the intermidiate plan but fall into one of these three buckets:

 

Actions for pay now– things you do today that you get paid for today.  Repeatable work that results in revenue day in and day out.  Transactional business that keeps the accounts receivable department in business.  This keeps your short term plan in order. 

Actions for pay later – things you do today that will result in revenue in the short and long term future – your annuity work.  For example:  M&A planning, building your sales pipeline, launching retail marketing campaigns ninety days before the holiday season begins, activities that will increase your trust and visibility in the industry or community (pro-bono work, networking, civic roles, volunteerism, etc.), and continuing education.  These activities can exponentially increase your volume and/or scale.    

Actions for pay while asleep.  This is where it gets fun and crazy!  What are you doing that will generate revenue without activity on your part?  Is it self service opportunities?  Franchise structure?  Is it an exercise in activity based costing and/or staffing up so you pay someone else to do the required activities that don’t generate income so you can?  This work is the “hockey stick” revenue plan  (see before/after illustration).  You and your team should continuously be asking these questions:

• What we can offer to the ever growing “on-demand” consumer population? Don’t be fooled by the often failing “self checkout lines.”   Self-service is king.  Here are some examples that generate business while you sleep – online retail sales, syndication, books, webinars, self-assessments, decline-pass-through programs, etc.  
• What should we be investing in that will grow faster than our revenue plan?  Capital investments, Joint-Ventures, investment strategies, barter agreements for distressed assets, etc.
• Can we leverage outsourcing for continuous processing, volume capacity, time management, and/or speed to market (think subcontractors)? Pay less get more!
• What are we doing to grow our talent?   Grow your leaders and your teams so they can multiply your efforts or replace them all together. 

Analyze what you do and ask yourself  “what bucket does it fall in?”  Now, Later, or while I sleep.  If it doesn’t fit any of those, it probably shouldn’t be done – at least by you.  Got your answer, but need help turning the ship?   Consider brining in someone in from the outside like a business or executive coach.  They can help you resist the muscle memory and accelerate your launch forward. 

Lead On! 

Lori Day

I Need A Wife

Is this you???? 

It’s 6:00 p.m. Shut down the PC and get ready for the Second Shift –
• Pick up son
• Call in to End of Day Production Conference via car
• Pick up Dry Cleaning
• Create, eat and clean up dinner
• Get kids bathed, read to, put to bed
• Sort mail
• Put in a load of laundry
• Confirm tomorrow’s drop off schedule
• Straighten the house so the maid can clean tomorrow
• Check personal emails
• Call mom, the kids, Aunt Betty or anyone else who thinks you have nothing better to do than chat and that you should call them more often
• RSVP to the weekend party
• Watch the News
• Veg out to Letterman
• (oops forgot to work out – must get up at 5:00 instead)
• Bedtime

Hit Snooze alarm until 6:00 a.m. – First Shift Begins

You think “I NEED A WIFE”  (See Disclaimer below)  Many working women (and men) are finding themselves in the Second Shift Syndrome. Where does the energy come from? Well that’s a whole different question, but the sure fire answer is the energy CAN’T last. It calls for energy, concentration, brain power, compassion, idea generation,  problem solving, and hopefully some fun too!  A schedule like that for a prolonged period can cause serious emotional, physical and relationship damage. I’ve certainly not mastered this conundrum, but here are a few things that might help us all stay a little more balanced.

Plan ahead – as much as possible. *
• Plan meals on Sunday for the week
• Stack kids clothes in outfits
Organize and follow a process
• Store like colored clothes together for easy wardrobing
• Have a mail center that is equipped to answer mail with my PC, checkbook, phone or trashcan at the time I open it
• Label things in the freezer and keep like items (meat, seafood, vegetables, etc.) together
• Visible family calendar/message center to keep everyone informed easily
Elicit help – asking for help is a good relationship builder
• Younger kids can help with laundry matching, putting their things away and pet duty
• Older kids and spouses – let them help with everything – it will give you time together, teach them some valuable life skills, and not make it feel like you’re doing everything alone
Have the best equipment to help make your tasks easier and more fun*
• George Foreman grill
• Vacu-seal and easy plastic food storage containers
• Swifter complete for cleaning
• Garbage bags with ties already in them to synch trash and carry with

Any other ideas out there to live “happily ever after”?

DISCLAIMER – “I need a wife” statement is for illustration purposes! 🙂  It is not to propose that wives are limited to, required to, only add value to domestic tasks – as a wife myself – that couldn’t be further from the truth!

*1/2 day seminar 10 Essentials for Maintaining an Executive Schedule AND providing Nutritious Meals for your Family provides more details on these and other topics to help you bring more work/life balance into your life – www.newdaysolutionsinc.com/workshops

All the best,

Lori