Negotiating as a freelancer

6 Powerful Negotiation Tactics That Will Help You Earn More

As a freelancer, there are two main factors that will dictate the income you’re able to earn:

  • Your rates
  • The billable hours you work

The second factor is the simplest of the two. Increase your hours and you’ll increase your income; increase the speed at which you’re able to produce quality work, and you’ll boost your earning capacity even further.

Though there is room to grow here, there’s also a point at which you simply can’t squeeze anything else out of this part of the equation. This is why negotiation skills are so important for freelancers to develop. They unlock the first half of the equation – your rates – allowing you to hack the value of every hour you work.

This task isn’t easy. You’ll be battling against clients who don’t understand the amount of time, work, and study that goes into what you do. Depending on your niche, you may also find yourself competing against workers in parts of the world where the cost of living is low, allowing them to charge insanely low rates for their work.

With these, and dozens of other confounding factors at play, how do you negotiate for a rate that truly represents your value?

1 . Know your range

The one thing you’re dying to know when negotiating with a new client is the maximum amount they’re willing to pay for the project. Oddly enough, many freelancers fail to give the same level of importance to their own top and bottom lines.

What’s the highest amount per hour you think you could reasonably charge for this work? What’s the minimum rate you’d be prepared to accept?

Knowing the answers to these questions will allow you to be firm, clear, and precise in your negotiation. Every um, ah, and hesitation erodes your confidence and your professional image in the eyes of your new client. However, if you’re armed with precise figures, you can negotiate with ease.

To calculate your minimum rate, you need to add up all your business and living expenses. Divide that amount by the number of hours you wish to work per month, calculate and add on the applicable amount of tax, and you have a baseline hourly rate to work from.

If the figure you arrive at is ridiculously high, you may need to take another look at your expenses to see whether you’re living above your means. Alternatively, you may need to add a few more hours to each workweek. If your hourly rate is below the average for your profession, then you’re well-positioned for earning healthy profits.

It’s important to keep in mind that this minimum hourly rate is not something you’ll ever reveal in your negotiations. Its purpose is to allow you to quickly come up with quotes and assess whether a client’s offer is going to work for you.

2. Stop charging by the hour

This may seem like a strange imperative since you’ve just been told that you should calculate your minimum hourly rate. However, as mentioned, this rate is for your eyes only.

Though many freelancers do charge by the hour, this strategy strangles your ability to convey value to clients. In their eyes, you will always be selling your time, and there’s only so much they’re willing to pay for that commodity.

If you charge on a per-project basis, by contrast, it’s easier to sell clients on the value you’re offering. The time it takes you to create the project is incidental – what matters is the deliverables you’re bringing to the table.

For example, if you offer an email marketing package for $600 that’s projected to bring in $90,000 in sales over the course of a month, and you have plenty of client testimonials to back up your work, you could end up earning the equivalent of a few hundred dollars per hour of work. However, if you approached the client with an offer of working for say $250 per hour, they may be inclined to search for a cheaper alternative.

It’s important to offer genuine value to your clients, and it helps immensely if you have a method for tracking your results. If you can provide them with data that proves the impact of your work, they won’t care how many hours it took you to do it.

Charging per project gives you the freedom to improve your speed and efficiency without docking your own pay. It’s also a great help to clients who may not understand how much you invest in your work and the skills you’ve developed along the way. As long as you’re delivering stellar results, the value of your work will be clear and the deals you strike will be fair.

3. Understand the full scope of the project before you quote

So, now you have the foundations you need to start building quotes. For every project, calculate how many hours you believe you will need, add a bit of wiggle room (because life rarely goes according to plan), and you have the bottom line of your range. From here, you can adjust upwards as you see fit to come up with your starting offer.

To be able to do this with confidence, you need to have a clear brief from the client. If they’re asking you to name your price based on vague details, don’t rush in. You need to give yourself room to maneuver.

To save yourself from time-wasters, you can go back to them with an equally vague ballpark figure (e.g. 15 cents per word, $500 per logo design, $1,200 for a professional photography package) and let them know that your prices differ depending on the specifics of the project.

This gives you room to increase your rate if the project is demanding or drop it if you feel it’s warranted. Just be sure to go in with a price you’d be happy to do the work for. If the client gets back to you, you’re already in a winning position. If not, you’ve saved yourself from dealing with a time-waster.

4. Be clear about the value of your work

Before you have a hope of convincing clients that you’re worth a premium rate, you first need to convince yourself. In the creative industries, where imposter syndrome abounds, this can be easier said than done.

As mentioned earlier, it helps immensely if you have a way to deliver quantifiable results. Google Analytics, A/B testing, and other tools can help you track the results produced by your work. This will give you an idea of what you can realistically promise clients and a method for proving that you’ve delivered on said promises.

If you’re new to the game and don’t have any data yet, ask yourself the following questions:

  • What benefits will the client get from my work?
  • Why is this a worthy investment for them?
  • How will my work impact their bottom line?

Not only will this help you determine what you can reasonably charge, but it will also help you identify gaps in your offerings. Perhaps you’re a writer offering blog posts, but you realize these will have a far greater impact for the client if you also share them on social media and use them to direct customers to a sales funnel. By offering a package of services, you’re able to increase the value you provide to your client while also boosting the amount you can reasonably charge.

5. Preface every negotiation with a reconnaissance mission

Your client may not be willing to divulge all the details of their budget up-front, but there are ways to go about getting an idea of the upper limit of their range.

If you’re feeling bold, you can go straight in with a question like “what budget are you working with for this project?” However, you may have more luck asking about the budgets they’ve applied to similar projects in the past.

Not only are they more likely to give up the information, but this approach also gives you the opportunity to upsell your work. If you’re offering more deliverables, then it stands to reason that you could charge more for the project (just be sure you can live up to your promises).

Even if you don’t get a precise dollar figure from these questions, you will get something you can use. Then it’s up to you to frame your offer in a way that hits their needs and negotiate for a higher rate.

6. Value fairness and honesty

Though you do want to aim for premium rates, you should never get there by ripping off clients. A well-executed negotiation should leave both parties feeling like they got a fair deal. Just as you won’t work with a stingy client any longer than you have to, your customers won’t stay loyal for long if you’re overcharging and underdelivering.

By knowing the value of your work, charging an appropriate fee, and then delivering clear results, you’ll earn yourself clients for life. These happy customers are more likely to recommend you to their colleagues and give you glowing testimonials for your website. Repeat and referral business is the lifeforce that nourishes every successful freelancing career, so it’s worth your while to be fair in your negotiations.

Freelance negotiation resources

If you follow the steps above, you can come up with reasonable rates for every project you quote for, without the need to turn to external sources. However, it can be reassuring to know that your offers are in line with industry standards.

The best people to turn to if you’re feeling uncertain about your rates are other freelancers working in your niche. If you’re the only writer, graphic designer, or social media guru in your circle of friends, there are plenty of online groups you can join.

Facebook is a great place to start hunting for industry-specific support groups. The hivemind will help you with things like rates and industry standards, and you’ll likely also meet individuals with whom you can share advice and tips. Just be sure to strike a balance of giving and receiving assistance.

If you just want to quickly check how your rates are stacking up, then bookmark the following resources:

Do you know a freelancer who hates negotiating with clients? If so, feel free to share this article with them. Sometimes a moment of acknowledgement from a friend is all it takes for someone to start seeing their own value.

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