Negotiating your fee is a skill that any seasoned entrepreneur will tell you is essential. We all want to be paid what we feel we deserve based on our expertise and type of services that we’re providing, but let me be the first to tell you that you need to remove that concept (what you deserve) from your head. When you’re in business for yourself it’s not about getting what you think you deserve, but rather getting what you ultimately negotiate.
Have you ever sized yourself up against a colleague or another entrepreneur and asked “why are they making more than me for the same skill set?” It’s a simple answer that I think you’ve already come to understand based on the title of this post, negotiation. If you can start to wrap your head around the idea that negotiation is just business, and quite frankly just good business, then you’ll soon find yourself in a growing class of “successful” entrepreneurs.
First, Nurses have to get out of that employee mindset:
As a nurse you show up for your shift (or office) ready and capable of performing the tasks at hand. Your patients/clients are coming to you, rather than having to go after your target audience. Whether dictated by proximity to the hospital/clinic/office, the insurance company, or the client’s need, it’s a perpetual occurrence that keeps you employed.
There are departments within your organization dealing with all of the variables to ensure a steady flow of clients. I’m sure you won’t have to look too hard to see all of the marketing efforts involved in promoting the institution you’re currently working for. And, there are other departments negotiating reimbursement rates, which in some complicated way then determines your hourly rate.
The concept of negotiation is simple:
So as I said before, negotiation is not about getting what you think you deserve. I truly believe nurses are a group of
professionals where fairness takes priority over winning. Negotiating is about coming to an agreement with your client where the terms on both sides are fair for the level of service and expertise being provided.
Money seems to be an uncomfortable conversation for most, but achieving a level of understanding about what’s fair as long as the terms are agreeable can soon ease some of that anxiety about negotiating your fee.
You’re no longer a party of one, you’re a business now:
Once those negotiations begin it’s not “you” that’s entering that discussion, you’re actually there representing your business. Even as a business of one is still a business. And, a business of any size needs financial resources to sustain and grow. You may need to pay yourself a salary, but your business is also going to incur expenses that need to be paid.
I’ve often found this concept harder for the solo entrepreneur from an idea that they assume all proceeds go to them anyway, and they essentially dilute their own value.
If you can establish a distinction between yourself and the actual work you’re providing (your company that is), then your negotiations will come from a more objective point of view. Most individuals feel that talking about themselves and boasting about what they’re capable of may come across as a bit self absorbed.
But, we’ve all found ourselves at one time or another raving about a product or service that really knocked our socks off, so think about your business in the same way. All you’re really doing is promoting the business. Think about it in terms of the value that your business is bringing to the client, and remove yourself from that equation even if you’re the one actually performing the work.
Get to know your client’s pain points:
If a client is looking for your fee right off the bat and it seems that they’re just price shopping, then it may be a harder negotiation from the start, but not impossible. Rather than throwing out a number, it’s best to interview the potential client while remaining focused on the value that your company can bring them.
Let’s say that a company wants to hire you to provide corporate wellness services both onsite and virtually to their workforce of approximately 50 employees. Let’s say that some of the tasks would involve some basic assessments, nutritional and medication education, and possibly provide updates to their healthcare providers.
Now let’s also say that the reason for the company wanting your services is that there is a chronic occurrence of absenteeism (as is the case in many businesses) due to health related issues which in turn may benefit from your services, especially when it comes to preventable diseases. They’re looking for initial supports to help them assess the situation (and their employees), which they understand to be extensive, with the likelihood of your business staying on after the initial assessment to then consult for approximately 10 hours a week.
The dialogue may consist of this:
“What are your issues, and what’s your goal?”
“Due to the issue of ongoing absenteeism in the company related to illnesses, we’re finding that overall our productivity has dropped by as much as 30% in some departments. Unfortunately due to financial reasons we’ve had to make cuts in some areas and the workload is much greater for some, but it’s apparent that this isn’t sustainable either.”
“What do you calculate your lost revenue to be just from employee absenteeism?”
“We’ve seen a loss of revenue on average at about $60,000/month.”
“Well, that’s unfortunate to hear, but obviously good to know so that I can assess how this is impacting your business and so that we can measure the success of these wellness services.”
Now, if you’re thinking in terms of an hourly rate for a set amount of time, then would you determine a rate of let’s say $50/hr for the initial month of an estimate of 100 hours for a total of $5,000? You’d then continue to consult for that same rate at an ongoing 10 hours a week with a rough monthly fee of $2,000. Seems fair, right? Wrong!
If this company is losing an average of $60,000/month due to a workforce that’s not “well,” then the value of your services, especially if they’re successful is going to mean much more to them.
Nurses are typically paid by the hour:
As employees, nurses are typically paid an hourly rate. However, just remind yourself this–you can’t keep doing things the same way and expect a different result. On that same note you can’t take the attitude of “this is the way it’s always been.” Change is good in this sense. Your fee should be based on the value you’re bringing. You should be pricing yourself based on the value you provide.
What you’re providing is the ability for both the individual client, and the business to have a more sustainable existence. The individual will thrive, and in this case, so will the company.
You cannot define yourself by an hourly rate, and you’re certainly not clocking in anymore. Think about a time when you were trying to negotiate your hourly wage up by $0.50 or $1.00/hr with your employer. Both sides just feel like they’re getting “nickeled-and-dimed”, and it’s likely that you aren’t feeling all that better about your raise if you get it. In many cases it may just open your eyes about whether you’re actually valued, but that’s for another article.
So rather than coming from the hourly fee, approach it from the value of the service and ultimately their return on investment. Sometimes a client may not have a set dollar amount in mind, and this may make it a bit more challenging. You’re going to have to do a few calculations on your own, but in this case you’re aware of their monthly loss in revenue.
By calculating a percentage of that loss, and even making a projection on potential profits, it can be a little easier to find a fee that’s fair for both sides.
So let’s say based on your experience you know that when an individual is compliant with medication, routine follow up, a healthier nutrition and exercise plan that they’ll likely have less sick days, and they’ll also be more productive.
Increased productivity = increased revenue
If in a few month’s time a company that is losing $60,000/month is now netting a profit of $100,000/month, you’ve in turn helped them correct the course by $160,000/month. So, taking into consideration on just the profits alone, negotiating a percentage of those profits seems fair since your business is partially responsible. It should also be said that in many cases a flat project fee may in fact make more financial sense for a company rather than paying a consultant by the hour.
The bottom line is that you need to capture the benefits within the conversation so that the client can better realize the potential return.