How to Determine What to Ask For (Part 1)

02 Mar

So you’ve been blogging consistently for a while, building a nice little following, and giving some free presentations to build your skills and credibility. Then one morning the email that you’ve been waiting for arrives. Someone wants to pay you to speak! Your eyes light up because as Randy Moss says, you’re going to get “straight cash, homey!” Now the question is how much cash should you ask for?

I’m not going to tell you the amount of money that you should ask for, but I will give you a framework for figuring it out for yourself.

Time

For this example let’s say you’re asked to lead a three hour workshop at a conference 500 miles from home. You are not being paid for three hours of work! You are not being paid for three hours of work, plus planning, plus travel time. You are being paid for your years of experience and your perspective on things.

Consider that if the event you’re invited to is 500 miles from your home you’re going to have at least 48 hours of your life committed to being physically present. You’ll need to arrive the night beforehand and, depending on location, you might be there the night after. If you live near a major airport and the event is near a major airport, you might be able to fly home the same day that you present. Factor that time into your asking price.

Responsibilities at home

When I travel I have to either pay my dogsitter to stay with Max and Morrison or pay to have them boarded at the kennel. If it’s winter, I might have to pay someone to clear my driveway while I’m gone too. You probably have some responsibilities at home that someone else will have to cover while you’re away. What does that cost? Even if there is not a monetary cost, there are opportunity costs to consider.

Travel costs

Invoice travel costs separate from speaking fees. There are too many unknowns in travel costs to bill at a flat rate. You never know when you’ll arrive at a hotel and discover that the $139/night rate is actually more like $195/night things like “city tourism promotion” taxes are added-on. (Seriously, I saw that on my bill this morning in Toronto).

I always, always, always make my own travel arrangements (exception being when I work with huge corporate clients like Pearson that have full-time travel professionals on staff). I’ve had too many instances of showing up at an airport and not having a promised car waiting for me or showing up at hotels that don’t have room reserved for me to trust anyone else. And as a bonus, when the hotel room is in my name I get the hotel points.

Ask for 20% more!

Teachers are accustomed to doing a ton of work for little pay. Therefore when someone asks us, “how much do you charge?” we tend to respond with a lower number than people in other professions. This is your chance to help people and get paid what you think you’re worth! Don’t undervalue this opportunity. Take the price you have in mind and add 20% to it. That way if they say “yes” you’ll be thrilled and if they say “no” you have room to negotiate.

The Tax Man Cometh!

Don’t forget that in the U.S. if you receive more than $600 from a single source, you will be required to report it on your taxes. Consider that before you settle on your final asking price. Then talk to your tax professional about ways to mitigate your tax bill.

A big thank you goes to Dr. Scott McLeod who sat me down four years ago and told me that I needed to start asking for more money.

In Wednesday’s post I’ll tackle figuring out what to ask for when someone wants to advertise on your blog. 

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  • Gillian @OneGiantStep

    Perfect timing Richard! I was thinking of connecting with you about just this topic. My question is WHEN do you know you should start charging? Not that I am anywhere near that place 🙂 I presenting a workshop at conference in Chicago next month (only my second ever) and there is no compensation (other than a conference pass, of course). When do you know that your portfolio is big/strong enough to ask for a speaking fee?

    PS….can I tell you how much I HATE Disqus for commenting? It asks me to sign in, I can’t remember my password, I get frustrated and almost give up, I try one more time, and leave this comment. 🙂

    • richardbyrne

      Hi Gillian,

      When you get invited to speak at a conference rather than applying to speak at a conference, that’s the sign that you should at a minimum politely ask for compensation beyond comped registration. If the conference planners are asking you to speak, they probably have a budget in mind for speakers. Just ask, “do you have a budget for the presenters you’re inviting?”

      One thing to keep in mind about conference presentations is that they can lead to other speaking opportunities. Because of that I have presented at some conferences for less than my usual fee.

      Now about Disqus, you should be able to sign-in with Twitter, FB, or G+ instead of a Disqus user name. That’s why I use it instead of the WordPress commenting system which has always frustrated me to no end.

      Sorry we couldn’t connect in Toronto. It was a very quick trip for me. I spoke all day on Saturday and flew home yesterday.

  • Jonathan Wylie

    Very interesting and some great points well made. I do some freelance edtech consulting myself from time to time, so this is good and timely advice. My question is in relation to taxes. I am not sure I will ever understand taxes 100% but the comment about earning more than $600 is one I have heard in a few places. On the IRS site is says:

    “It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.

    All income earned through the taxpayer’s business, as an independent contractor or from informal side jobs is self-employment income, which is fully taxable and must be reported on Form 1040.

    Use Form 1040, Schedule C, Profit or Loss from Business, or Form 1040, Schedule C-EZ, Net Profit from Business (Sole Proprietorship) to report income and expenses. Taxpayers will also need to prepare Form 1040 Schedule SE for self-employment taxes if the net profit exceeds $400 for a year. Do not report this income on Form 1040 Line 21 as Other Income.

    Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.

    Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.”

    Source: http://www.irs.gov/uac/Reporting-Miscellaneous-Income

    Thoughts on that? I know you are not a tax professional, but I have heard conflicting views on this…

    • richardbyrne

      I just worry about what my accountant tells me to worry about. I guess the easy thing is to say, when in doubt, report it.