Ji Eun (Jamie) Lee

Professional Speaker & Negotiation Trainer

Tag: value

Anchoring for High Value for the Self-Employed

Autonomy. Location independence. Being your own boss and doing the work you want whenever, wherever.

With the freedom to chart your own path and potential to earn as much money as you can as a freelancer or independent contractor comes the responsibility to negotiate for pay with customers. When you were an employee of Boring Company XYZ, you negotiated once, before starting the job, and maybe twice, if you’re an ambitious rockstar, to ask for a raise. Now that you work for yourself, you are constantly negotiating with every new prospective customer. On top of juggling sales, marketing, IT, and finance roles, you bear the burden of making or breaking your own livelihood by negotiating the value of your work.

Pricing your new product or service can feel like a scary dark art, especially for the first-time freelancer or independent consultant. Uncertainties are great, riddled with difficult questions: What’s the optimal price to charge a new customer? What if you ask for too little or too much?

For some of us, the desire to please customers — coupled with the insidious desire to have people like us without being threatened by our ambition and bullishness — can make us squeamish about asking to be paid for our value.

“You can pay me whatever you want for my virtual assistance/copywriting/graphic design services. I’ll happily redo your spreadsheets/rewrite your press releases/redesign your logo, bend over backwards and work the weekends for you.”

Sound familiar?

Worse yet, we pre-empt possible objections by cutting down our current prices, unwittingly lowering expectations and giving away our power even before a single word is uttered from the other side. Then at the end of the month, with the rent due and dark bags hanging under strained eyes, we wonder where things went wrong and shudder to consider the alternative: exchanging the entrepreneurial dream for a green Starbucks apron and a steady paycheck.

It doesn’t have to be this way. Setting your rate doesn’t have to be a stab in the dark. Making customers happy doesn’t have to entail underselling your value and working for peanuts. In fact, setting an ambitious anchor, or a reference point, for the monetary value of your work can not only help you earn more money but also increase your perceived value, making you more desirable in the eyes of the customer.

Here are five steps to set and negotiate your rate like the boss lady you are:

1. Run the numbers. How much should you charge per hour? To get down to brass tacks, your hourly rate is a function of 1) billable hours, 2) sum of expenses and 3) profit. Based on the number of hours you expect to charge your customers, you can guesstimate how much you need to bring in to cover your living and business expenses and have enough remaining to save and invest back into your business. For the sake of simplicity, let’s assume you have about 2,000 working hours in a year and can bill half, or 1,000 hours out to customers (the other half you spend networking at Meetup or industry events, writing emails to prospects, paying your bills, and doing other administrative tasks). Sum up all essential expenses such as rent, food, connectivity, computer, and legal expenses. To this figure, add your desired profit, or the amount you want to save for retirement, to cover future expenses, or to invest back into your business. Let’s say that this adds up to $50,000. $50,000 divided by 1,000 billable hours is $50/hour. Your standard hourly rate is $50.

How does your hourly rate feel in your mouth (humor me, ladies), when you say it out loud? If it doesn’t feel ambitious enough, raise it by another 20%. Then practice saying the following out loud, at least three times: “My standard rate is $X per hour.”

2. Listen to your customers. 80% of a successful negotiation is preparation. In other words, nearly all the work in a negotiation is done before you sit down to negotiate. Just as you invested countless hours to research into your field before you developed your services products, you’ll need to invest some time upfront to learn as much as possible about your customer before negotiating. The best way to do this is to ask open-ended, diagnostic questions that start with why, how, when, where, and who. Here are some sample questions to help you get started on the listening and learning process:

What are key metrics that determine the success of this project/assignment?
How can I help address your specific pain point or preferences?
How long do you envision this project/assignment to take to complete?
What is your budget for this project/role?
Who has the final say in the budget and scope of this project/assignment? When can I speak to her?
3. Generously demonstrate your value. By now you know what to charge per hour and you are armed with enough knowledge to both ace the job and make your customers supremely happy. Resist the temptation to rush into work. Instead, generously demonstrate your know-how, expertise, and skills to your prospective client. This can take the form of a complimentary consultation, demo account, or a sampling of what you can offer.

4. Frame for high value based on credentials, experience, and expertise. When you make the pitch or offer your proposal, frame for high value based on your education, industry-specific know-how, or glowing references. You’ve worked hard to achieve your credentials, so don’t be shy about owning and sharing them with your prospective customer.

5. Offer options and paint the picture for alternatives. Your proposal would have helped your prospective client see a crystal clear picture of the end result of having worked with you. What would the alternative look like if they passed up on the opportunity to work with you? Working with you, your prospective client would benefit from the economic value of your contributions. If she were to pass you up, what would be the cost of missing out on the unique expertise, accountability, or convenience that you offer?

With the right mindset and preparation, you can confidently ask for your value and make your customer happy to hire and pay you. At core, the same basic principles for workplace negotiation applies to negotiating your pay as solopreneur: firmly believe in your value, and articulate your value based on the benefits your customer will reap from working with you. Then relish your freedom and success. After all, you’re the boss, so give yourself a pat on the back for a job well done!

Confronting life

First.

I’m stealing from a monk.

I read this New Yorker profile on Ittetsu Nemoto, a Zen Buddhist monk who works with suicidal people in Japan. He is a life coach, in the ultimate and literal sense. His workshops are near-life experiences for those who want to die.

I read the article twice, second time underlining segments that really moved and resonated with me. I underlined and circled this:

Nemoto believes in confronting death; he believes in cultivating a concentrated awareness of the functioning and fragility of the body; and he believes in suffering, because it shows you who you really are.

He believes that suffering produces insight.

He also believes that helping people should be like eating, something you just do every day: routine, essential, and beneficial.

He helps people confront the fear of living.

Fear is a great motivator. When we’re afraid of losing something, we work hard to keep it. A job, a relationship, an apartment, a precious stone. Sometimes fear motivates us to act.

But sometimes fear holds us back. It keeps us from speaking up, being bold, going for the things we want. This is the fear I want to see people overcome.

The message is simple. Don’t be afraid.

Sometimes the fear in our heads is an echo of an irrelevant past. I want to help people focus, get past the fear, and act for the present and beyond.

Second.

I’m learning more and more that it’s not about money. Yes, I’m talking about negotiation. It’s about value. If you are good at what you do, the tremendous value you bring to the table will speak for itself.

I live in an expensive city with chaotic streets full of busy people. When you live here, it’s easy to confuse money with value and success.

I believe you have to dig deeper to understand each person’s success. Just as everyone has their own journeys and frustrations, they have their unique definitions of success.

The freedom I relish is extremely valuable to me. It affords me the opportunity to be a student again and to aspire for a different kind of success.

And today I am blessed by the abundance of ideas, of words, and of confessions.

Third

I was wrong.

I thought this stump of a formerly thriving money tree was dead. Last winter, it had grown too big for our bedroom, so C chopped it down to its trunks.

Two weeks ago, I noticed it was sprouting green leaves.

This was taken last weekend.

This was taken last weekend.

To be honest, seeing this kinda spooked me. It’s like the living dead, a zombie. Blind to its shortcomings, unstoppable in its quest for water and light.

But I had to respect its incredible will to live. So we started watering it again.

This was taken this morning.

This was taken this morning.

Flourishing and thriving, on its path back to gloriously beautiful.

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