Would you like to get paid your normal rates but also an additional amount in equity?
Today’s episode is a little bit different, because it’s taken from a coaching call Roland Frasier did with a Consulting for Equity Mastermind. The Mastermind is a group he started to help consultants get equity in the companies they’re working with while also getting paid their normal rate.
Listen in as he walks someone through how they can get their normal consulting fee of $75k but also get an additional $125k in equity.
Getting What You’re Worth
He’s talking to someone who gets a $75k fee for six months of consulting. Time-wise, it’s less than a day a week for 6 months. 25 days of his time. That’s $3000/day on average.
Roland thinks he should charge more for his consult. If it was in the neighborhood of $10k to $30k, that’s his discovery day. He suggests starting with $20k for a consult day. It’s probably not that big a deal in that world. For that $20k, can you deliver $200k of value in the plan you give them to execute? That’s the math Roland wants to take us through. What are the 10x benefits they can get from your consult?
- to quantify the increase in customer retention
- to quantify the number of new customers
- to quantify how that impacts profits
Give them transformative information that will say:
- on average, my clients have achieved these benefits
- they’ve aggregated $400M
- the average client sees a benefit of $1M or more.
If he can do this, it’s very likely they’ll need him to come help them make those things happen. The more he shows them what the plan looks like and what the results will be, the more they’ll want him to be the one to do it for them. That’s the benefit of a discovery day.
Getting Creative with Your Offers
So, if the average benefit is $1M in profit, and it’s a $20M profit company, then arguing for 5% would be to take the full benefit, so you might argue for less than that, so there’s a benefit for them as well.
If you’re offering a $1M benefit, you could charge $200k. Or, what if, instead of charging that, you offer a hybrid deal: your consulting for $75k and an additional $125 in stock in the company. So, $75k in cash and $125 in stock.
This might give you ideas for ways to expand what you’re doing. Not everyone you meet as a client will need everything you’re able to do for them. The more leads we can turn into clients, the more profitable we’ll be in a DPL kind of performance in our efforts to generate customers.
Be thinking about: what other types of consulting can I offer? You may have a business where you help companies improve retention and reduce churn, but they don’t all engage you initially for the $200k consulting. Maybe they love what you’re saying but can’t afford you right now. You don’t want to wait, so you can offer a less-intensive advisory capacity.
Or Roland will put his money where his mouth is. What if he comes in on performance, and each time he gets them another $100k in performance, they give him 10%? Say: “I can get you $1M for free, and when I get you there, you give me $200k.” They have nothing to lose and everything to gain.
There’s also transactional consulting. Are there things that are finite in their delivery that are a one-time occurrence and specific? On that transaction, you’ll get compensation that’s a percentage of what you get for them.
The more services you have to offer in more situations, the more money you’re going to make.