My Million-Dollar Minimum Fee 

“You get what you pay for.”

When Early to Rise was at its peak, I was regularly petitioned by readers asking me to mentor them. I was always flattered by such requests and wrote personal no-thank-you notes, which were generally well received.

But then someone wrote me back, accusing me of being stingy with my time. I sublimated my indignation into an essay in which I recounted the experience that first made me realize how rude it is to expect someone you hardly know to devote his valuable time to you.

The essay was widely read, but it did not achieve its goal of forestalling further demands on my time. After several more requests arrived, I published one of them (name withheld) with a blunt reply that pointed out the obvious considerations:

* Time is a limited resource. When you ask people for their time, you are asking for a lot.

* You are not the center of the universe. Just because you need help doesn’t mean others are obliged to help you.

Alas, that didn’t work either. So I tested another idea.

It was at a conference. After I gave my speech, a young woman, brimming with excitement, cornered me to describe her brilliant business idea and suggest that I might want to mentor her.

Now it just so happened that one of the concepts I’d talked about in my speech was that in business, time is money. And in order to use your time as advantageously as possible, you need to know how to value it.

“You take the amount of money you wish to make this year and divide it by 2000 (the number of working hours in 50 40-hour work weeks),” I’d told the conference attendees. “So if you want to make $100,000, the value you ascribe to each hour is $50. If you want to make $500,000, it is $250. If you want to make $1 million, it is $500.”

With that in mind, I did a quick calculation and told the young woman that I would be delighted to help her, but my minimum fee was $5,000 an hour. (This happened at a time when my income was quite high.)

“Huh?” she said.

“What?” I smiled.

“You must be kidding.”

“Actually, I’m not. You see, for every hour I would spend working on your business, I’d be taking an hour away from working with one of my partners or employees on one of my businesses. And each of those hours is worth about $5,000 to me.”

She became indignant. “Well, it’s not worth that much to me!”

“Well then, you have your answer,” I said.

That ended the conversation.

But I didn’t like the way it made me feel. Not only was I pretty sure that I had failed to get her to understood the very important lesson I was trying to teach her, I knew that in her eyes, it looked like I just didn’t care if she succeeded or failed.

I chewed on that a while, and came up with another approach… one that finally worked.

I had, basically, two clients at the time. One was a large company and the other was a start-up. The deal I had made with the second client was the same as the deal I had cut for myself with the first. And that was a combination of a base yearly fee and an incentive bonus, with a minimum payout of a million dollars.

It had worked extremely well for my first client and was working extremely well for the second. So I decided that I would incorporate it into my response to all future requests for my time in helping others build their businesses.

From then on, I would say, “I would be happy to consider helping you. But you should know that my minimum compensation starts at $1 million.”

That did the trick. It ended the conversation politely and without provoking resentment. And so I used it successfully for several years. Until someone – some already successful businessperson that wanted to grow his business – called my bluff.

“Sure,” he said. “No problem.” He reached into his satchel, pulled out a checkbook and a pen, and said, “How should I make it out?”

Now I was the one learning the lesson. I had met someone smart enough to understand the value of my time and rich enough to pay me for it. But I knew from experience that mentoring a new business was itself a full-time job, even if my role would be simply to give advice. And I honestly didn’t have the physical or emotional bandwidth for that kind of commitment.

I had to admit to him that my million-dollar minimum fee was specious. But I made a counterproposal.

I told him that I would give him all the same advice, answer all the same questions, make the same suggestions and introductions, etc. as I would if we had a formal agreement – but I’d do it for free.

Now he was perplexed.

“What do you mean?”

“I mean just that. I’ll do it for free… but at my convenience and on my terms. You can hit me up at my favorite cigar club any Friday between 5:30 and 9:30, which usually means between my first and my fifth tequila. After that, you’re not going to want to listen anyway.”

“And that’s all for free?”

“Yes.
“I don’t get it,” he said.

I explained. If we went with the fee arrangement, he would feel obliged to follow my advice. And since he would follow my advice, I would feel obliged to help make his business succeed. That mutual obligation would put a lot of pressure on both of us. It would be a serious business relationship.

But if I gave him the same advice for free, I’d feel no obligation to make it work. And he’d have no obligation to follow it. We’d both just be shooting the breeze. The advice would be the same. But its value (to him and to me) would be de minimus.

He told me he would think about it.

And then, the next day, he called to say that I was right. So he’d have to decline my free offer.

“But don’t forget,” he said, “my original request – and a million dollars – is still on the table.”