Why You Need to Stop Trading Time for Money

Welcome to another episode of Business Lunch. Today's episode is another feature in our Consulting for Equity series. It's a new business Roland started to help experts and consultants get out of the trap of trading their time for money. And on this episode, Roland shares where the idea came from and why he stopped giving out free advice. How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who share their biggest secrets on how they think and achieve success? Grab your seat at the table because this is Business Lunch with Roland Fraser and Ryan Dice.

Hi, everyone, this is Ed o' Keefe and I'm here with Roland Frazier. What's up, Roland? How are you doing today?

Doing great.

How are you doing?

Awesome. I'm super stoked to talk about. I know one of your favorite topics. It's becoming one of my favorite topics. Just so everyone knows, Roland has created what I think is probably one of the best pathways for to get wealthy through something called consulting for equity. It's perfect for obviously consultants, but it's also perfect for our coaches. High ticket coaches, experts, authors, agency owners, successful business owners, SaaS, creators, professionals looking to transition, really. Roland, I want you to dive into this in a second to share, like, what is consulting for equity and how you came. We're gonna. Like the whole. The whole show today is to go through Roland's journey of creating it and how is literally the best way to get paid? Create recurring revenue as well as equity and some big exits as well. So. So welcome to the interview today, the show.

Yeah.

Good to be here.

Yeah.

Let's take us all back. Like, how do tell us what in your mind consulting for equity is first, and then we'll kind of work back to, like, how it all got started and stuff like that.

Sure. Well, so you have. You have a lot of ways that you can be compensated for something. You can be compensated. I say there's five real levels to it. You've got the one that most of us do, which is we give free advice. People ask us for our help and to use our IP and to benefit from the knowledge we've got. And because we're good human beings and want to give back to other people, we help them out, which I highly recommend doing. The challenge is, where do you draw the line of spending all of your time doing that? And then that starts to take away from your family and your other time that you've got available to do things. And so there has to be, I think, a dividing line, a point at which you say, I'm Willing to share and help people, but within the context of a short exchange, not something that is okay, well, we need to like, dive into all the questions that I've got that are going to help me give you the advice that I can ultimately give you. And so that's like, that's level one. That's the free advice. Level two is that we go and maybe we say, well, what if I started turning that knowledge into an actual compensable skill and I charge by the hour for what I do, which I did for years as an attorney. And even if though you charge $1,000 an hour, right, you're limited. Let's say maybe you can build 2,000 hours a year. So like that's $2 million, and that's where you're capped out, which sounds good. But then you take out expenses and advertising and costs and partners and rent and all the expenses, and maybe you can make, you know, 200, 400, 500, $600,000. I say I call them dancing bears, right? You're dancing bear because as long as you dance, people throw money. But when you stop because you're out of out of hours, that will allow you to dance, then the money stops. And that's the trap that you refer to, the dollars for hours trap. So I never really liked the idea of being a consultant because I saw that trap. And even though I did practice law for several years, where I did we build by the 10th of an hour, you get really granular with your tracking of your time and you get really aware of what you're able to get for that and what the limitations are. So then the next level, which we also, I learned practicing law, is that you can charge a flat fee. So the nice thing about flat fees are that if you've got a service that you perform over and over and over, it becomes kind of rote. You systematize it. You've got staff that can help do a lot of the. A lot of what's being done. And so if I can charge $1,000 to do a thing like for us, it would be maybe a document maybe. I don't think we charge $2,000 to form a corporation, right? Well, I don't spend 10 minutes forming a corporation, right? I don't have to do that. I get a flat fee. So that's nice. It lets me leverage the knowledge that I've accumulated in the systems that I've built to deliver the knowledge or the service that I've got. That's a really cool model. And I think that's where most people cap out. The next level three. That was level three. The next level, level four would be where you actually get into a revenue share. So you're saying, okay, we've got a project I'm going to consult on. You've got this thing that to have done and we're going to talk about it, and then I'm going to help you make it happen. And I know that I'm going to create a continuing value for you in that thing. And so I say, well, Ed, if I'm going to do that for you, like maybe it's. I'm going to create an advertising campaign to help you get clients. Anything that comes through that effort that I've done to create that intellectual property asset that I own, I'm effectively licensing it to you to use the way that we talked about and receiving some sort of revenue, some share of the revenue that comes from it. Right? And it's better as a revenue share than a profit share because revenue, you get a lower share, but there's no manipulation of what the profits are, right? For your, you know, your Ferrari and your trip to Tahiti, that with your family to have the retreat, you know, so. So that's level four. And then for me, I was, I was just always thinking, I was like, well, what I'm doing when I do this stuff is I'm really helping somebody build their brand. I'm helping them build an asset which I watched as an attorney, people sell over and over and over for multiples of the profits that the things that I had helped create were generating. And so I was like, okay, well, anytime that you're a consultant, the Rev share goes away basically, at some point or doesn't apply company wide. It only applies to the thing you.

Do or it doesn't pan out how you thought it would on the front end. Which is very. Is actually one of the most common challenges with just REV shares, right?

Or it goes away because it's a campaign that you helped with and they run that campaign for a year and a half and then some other person gets to do that, right? So I was like, well, how could you get compensated on a continuing basis for the things that you do and actually be part of the whole company that wouldn't go away? And the answer to me was to get a piece of ownership or equity in the company. And when you have ownership in the company, then you have the ability to get paid forever. You have the ability to do something one time and have a continuing ownership interest, just like somebody that buys A share of stock in a company. Right. So what I started doing was I started offering that I'll help you with this problem that you've got or this challenge. But what I want for that is I want to have a bit of ownership in the company. And so that's really kind of when I started doing that at scale and when you.

Just for clarification, because I know like when people look at like level three, level four, most people are probably either in I give free or all four stages in some level, like I give free advice, I'm wasting. Like for you, you liked helping people. Yeah, Right. So we can even go back to that. You liked helping people. You'd run events, you'd run high ticket coaching seminars and people would, or you'd speak at other people's events, they'd come up and try and talk to you. Can I ask you a question? You got a minute? And my understanding is like one of the things you told me was the challenge with that is it just got none of those relationships panned out into actual serious partners. That's a big challenge with it, correct?

Yeah, yeah. Very, very few. Right. So. So when you're, you're helping somebody for free, free has no value. Meaning that the people don't have skin in the game and therefore they're less likely to, to try to get a return on the investment that they've made by taking action on the things that you're talking about. So I have a good friend of mine who sat here with me night before last, and the way that he came to sit on my couch was to give me $25,000 to spend four hours with him here. And, and he's a friend of mine and I've had lunch with him and I've talked to him throughout the years and I've helped him with a particular situation that he's in that nothing has changed. And so when he called me and.

Asked me as a friend, when you're giving him free advice, nothing changed.

And so when he called me again about this thing that we've talked about several times and he said, hey, you know, I just wanted to see, I think that I need to do this, this and this. What do you think? And I said, I think you need to hire me to help you because if you don't, you won't take action. And do you know how I know that? Because you haven't. Right. So with love. The best thing that I can do for my friends, for my potential clients is to actually have them invest in themselves. So that they have skin in the game so that there is pain for them if they say, I mean, I spent that money and I got that advice, but I'm not doing anything well.

And so regarding giving free advice, there's like two, two layers to that problem is, number one is if you don't charge them and somebody mentally is like, I'm willing to invest 5,000, 10,000, 15,000, $25,000 to solve this problem. But you give the free advice, well, he or she still has that money in their head. They're willing to go spend with somebody else, and they're going to. They will go spend it or go buy the service or, or hire somebody. And the second part is that many business models are designed on give free advice with the hopes that they become clients or the hopes that they use your services or your software. So can you talk about the second part a little bit? Like on the agency, on the. Yeah, the hope side of it, it's.

Kind of cool because I was, I was thinking about how I, how I do that, because somebody just asked me a similar question. It's like, well, how do I give advice without. Like, how do I give advice but then get people to want to retain me but also not be a jerk and say, you know, well, you know, the meter's up and so I can't give you any. I can't have this conversation with you unless you pay me money. Because that's just weird, right? So the answer that I found is that when someone talks with you and says, can you help me out? You say, well, tell me what it is that you need help with. So now what you get there is you, you let them talk about the challenge that they've got so you can hear what is the thing? What is the constraint? What's the issue? What's the limitation that they're dealing with? And then you can say it back to them. So what you're saying is that 1, 2, 3, 4, 5.

Yeah, yeah.

Then you say, why do you think that is? And then they'll tell you why they think it is. Now, at that point, that's the conversation that you're going to have before you get retained, when you get retained or when you get to that point. Now I say, man, I can think of three or four things that would probably solve that for you, but I would need to get to sit down with you, drill down, get more information, more facts, and really set out a plan. And that's going to take about four hours, the way that I do that. And Then you go into your consult. Right. And I found that that's really helpful. So I don't feel like I'm shutting somebody down. They're getting to have the catharsis of, you know, of emoting and communicating to me and telling me what the challenge is, which is pent up in everybody. Right. All of us want to share that.

Totally. Yeah.

To feel heard and understood and then to have somebody say, I think I have some answers for you. Right. Here's the process by which we'll get to those answers.

Thanks for hanging out with us today. If you want to learn more about the Consulting for Equity program, you can go to businesslunchpodcast.com CFE that's businesslunchpodcast.com CFIE it's always a pleasure to have you with us at the table. We'll see you next time.

You've been listening to Business Lunch with Roland Frazier. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

Hey, quick question. Do you know someone who's looking to grow as a leader? Maybe their team is growing a little faster than they expected? Or maybe their new rule requires them to work a little bit more through people? If the answer is yes, I want to recommend a new podcast by the scalable media network called Ready to Lead. It's hosted by Richard Lindner, one of Roland and Ryan's business partners, and Jeff Mask, who's one of the top executive coaches in the world. They cover tactical strategies on how to improve as a leader and also their biggest failures they've had throughout their career. You can find the show@readytolead.com or search for it wherever you listen to podcasts.

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