Negotiation- I hate it! Tips welcome...(10 Posts)
I am starting a self employed business venture and very excited.
I have been offered my first contract and am in the process of negotiating an hourly rate for my services.
Its making me so uncomfortable and making me doubt myself.
Does anyone have any tips and pointers for negotiating an hourly rate?! Or even any confidence boosters?
I dont want to sell myself short. I think what im asking is fair and not extortionate and have not ventured too far from the original offer. Now im panicking that i may lose the contract and feel like just accepting the original offer for the sake of keeping work.
Stand firm. You have asked for a fair rate, you are happy that you've given a little bit in the negotiation. Now do nothing. Silence is golden. Don't start contacting them to see what's up, offering more discount, etc etc.
Just wait and see what happens.
If they can't make your rate, they can't make your rate. Use the time to find a client who will.
Don't undersell yourself - what do your competitors charge in comparison?
The rate that competitors charge ranges greatly. I would say that i am in the middle, slightly dropping toward the lower end of the scale. This is more due to my lack of confidence at the moment, im not making any wild promises that i could not keep and even though i do feel that i coukd go higher, i think i would feel more confidence in doing so when i am a more experienced negotiator.
Im not chasing them at all. I have sent them my rates and will leave them to get on with making their decisions regarding them
whilst secretly checking my emails every 5 minutes
Many years ago, my first freelance client explained how to charge him. Basically (if your last job was in the same industry) work out what you earned for each day's work, then double it. You will only work for pay half the time, and you will have no holiday or sickness pay, so you need to build in a bit of fat. Then, when you get busy, build up a client roster, you increase your rates gently to price out the time wasters and the work you hate doing. I'm retired now but it was the only sensible formula anyone ever had and it worked in both London and NY. Hope this helps.
What cressetmama said. Also, make sure you have a separate bank account that you put your tax money into, in fact have as many accounts as you need so that when the money is needed for whatever purpose it is there. I used to cringe when I told people my rate. Now I know I am worth that rate and have no qualms in saying what it is.
I've not got any advice re confidence. All of my quoting is done by either email or on the phone. Oh and I'm not sure if this law applies where you're based but here I have to tell people that late or non-payment may result in them having to pay collection fees otherwise I legally can't apply those charges to them. Luckily I've not had to chase anyone for payment but I always make sure I cover my butt so far as that is concerned.
Don't have an hourly rate it makes you ir35 more vulnerable if that is applicable. Have a fixed price for a day or a job. You define the day.
I got my rate, my arguments! That gave me the confidence to call another new client who ill be doing once anually work for who i heard is not great at paying up to tell him i wont be commencing the work until its paid up in full up front
I think we all undersell ourselves a bit when we first start out. On the advice of my accountant I have recently started timing each piece of work for each client, even though I charge a fixed monthly rate. It is a real eye-opener and will give me ammunition to up my rates for those who are getting an extremely good deal!
There are free online timers like toggl in which you can set up each project/client and also "projects" for admin, research, whatever as that takes a frightening amount of time.
I got a great tip from a guy who wrote a book about negotiation. He said that it helps if you do not see it as adversarial, but instead realise that you are both on the same side, ie, they want some work doing & you want to do it. It's just a question of finding a rate that suits you both. Makes it easier if you actually say this to the other party at the start of negotiations, whatever they are about.
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