How Much Should You Ask To Get Paid As an IC or Employee?

Have you ever been in a situation where you wondered how much you needed or wanted to get paid by an employer or contractor?

(Are you in the Ferrari / Lamborghini class? or somewhere down below in the value of your service?)

Regarding how much to ask for in a job, did someone or some school advise you that you should NOT work for less than 50% of the charge for the service you will provide?

HOGWASH!
This post will piss some of you off, but I have to tell you that advice is worthless.

The answer to knowing how much to ask for is real simple.

What I advise to my practitioner clients, is to recognize there is no correlation between what the business charges for your services and what you are paid.
INDEPENDENT CONTRACTOR or EMPLOYEE: it doesn’t matter.

As a biz owner, just yesterday (again) a Massage Therapist looking to work with us said, “I NEED to make at least 50% or I won’t work here”.

I said “Great, 50% of what?”

She replied: “Just 50% of the charge…”

Me: “… uh, ok, so for example, 50% of $20 means you’ll ‘make’ $10 — you’re ok with $10/hour?”

See, it makes no sense to just stand solid on a percentage of some unknown number.

Each business has different over-head, and not every part of the business’ operating costs go into determining the wage to pay a practitioner. Do other businesses like Google, or Apple or the restaurant down the street figure how to pay their employees and contractors based on a percentage of their revenue? No!

And consider this: Even if they agreed to pay you 50% of the rate they charge for a session, your half may be too low, and not match what YOU are worth. So stop asking for a percentage of the charge — to me, it is (at best) silly & naive and (at worst) can make you miss out on some really terrific opportunities to work at great places that provide you with a high value of experience, knowledge and relationships if a place cannot afford that high a percentage, or if given the 50% split, could earn you a lot less than you should/ could be making.

Biz owners work all the numbers to ultimately run a biz that is sustainable, for both the business, as well as for clients and workers. If expenses outweigh the revenue generated, the business fails.

If we charge more than clients feel they are getting in value, they won’t open their pocket-books or return. If businesses pay too high an amount to the practitioners, the business won’t be able to keep their doors open because they can’t sustain the costs… it’s a fine balancing act.

My Advice:
Instead of asking for a flat percentage of revenue generated from the service you provide, I advise you to know your value, and negotiate to be paid that amount. For example, if you feel your value is $30 an hour and as an employee or contractor, you can and will consistently provide above and beyond $30 worth of value to your clients, the smart biz owners will happily pay you that amount, IF their business can afford it.

You must know what the value is that you provide, so you know what you want to earn per service!
(I’ll write another blog post about determining ‘value’ down the road if there is an interest in that.)

Once you know what you want to make per hour of service, it is a simple situation of negotiation with the biz owner by helping them see how your work is worth the amount you are requesting. When you are a skilled practitioner, you bring a lot of ease to the business in providing services that result in happy clients, re-bookings and referrals.

If the biz owner isn’t able or willing to pay you the amount or at least negotiate an amicable arrangement — you should walk away and find someone who will see your value. If you still need to practice your skills and improve, than by all means, use the time well to get to be be a rock star practitioner, and then move out here to San Francisco and work at my center!

And of course, if you are absolutely sure your services have a high value and you’re ready to run your own show, you might want to consider opening your own private practice and charge the amount you deserve on your own in your own biz! (You’ll soon have your eyes opened to the business owner’s perspective.)

Practitioners who are wishy-washy about rates, and don’t yet know their value need to speak with me privately to work on getting clear on how much to ask for.

Great practitioners are worth their weight in gold to a business. Without skilled service providers, the service business has nothing. Talented providers are viewed by smart business owners as an asset, rather than an expense.

Are you in the Ferrari / Lamborghini class or the beat up old clunker (or somewhere in between)?
Make a choice right now, and answer this question: Are you an asset or an expense to your boss?
(post it below )