How to Negotiate Clients as a Freelancer - Besides their skills, freelancers must manage their businesses, including marketing their services, keeping track of expenses, and engaging in negotiations with new clients.
For freelancers, it might be challenging to have those kinds of conversations. Freelancers who don't negotiate successfully can miss out on revenue, postpone the expansion of their project portfolio, and miss out on future opportunities that might otherwise come in through good connections with customers.
Dr. Job Pro is here to let you know how to negotiate clients as a freelancer.
The Importance of Contract Negotiation
Negotiating a Job Agreement: What You Need to Know
If you've never had a contract before, you may wonder why you need one before accepting a job.
It's understandable if you've never had an agreement before as a freelancer and aren't sure why it's necessary.
You and your employer's interests are safeguarded through contracts.
An agreement is required to:
Define the project's parameters and scope in great detail.
Decide on payment terms, timeframes, and the number of changes included in the cost.
Ensure that both your client and yourself are protected by law.
If you want to attract higher-paying clients, show that you are running a professional firm.
Read also, How to Get Started On Dr. Job Pro as A Freelancer?|Drjobpro.com
It is only via the use of a contract that you can rest assured that you will be compensated adequately for the task you have performed.
To get paid, too many freelancers are required to go through a series of hoops after being engaged for one task.
In the same way, a contract ensures that the customer knows what they are paying for and that both parties are getting a good deal in the end.
How can you Negotiate Clients as a Freelancer?
1- Add a personal touch to it
The quality and quantity of a company's interpersonal contacts are critical to its success. The chemical and physiological basis for trust in the brain is familiarity, which is why people do business with those they know.
For freelancers, trust is essential.
Being self-employed means having no one to turn to for support. Your relationship with a customer is your business.
Negotiation success depends on a potential client's willingness to put their trust in you and work with you from the outset of the conversation until it is finalized.
Your brand and beliefs should be reflected in negotiations with a potential client as a freelancer.
You can do this by expressing your narrative, describing your unique skills and abilities, and looking for common ground to create relationships.
2- Stop Getting Fooled by Low-Paying Platforms
As a freelancer or contractor, determining your value is one of the most challenging issues you'll confront.
Freelancers often take jobs at a discount from the going rate to expand their portfolios or obtain practical experience in the field.
It is common for potential clients to send low-ball offers to potential freelancers via online freelancing sites. Avoid getting caught in this trap.
They can help you expand your portfolio and increase your earning potential, but they can't help you negotiate a livable wage.
A low-responsibility part-time job and freelancing at your own pace may be a better option for you than working for a platform that takes a percentage of your earnings. Remember that you are helpful to someone because of your intrinsic worth and experience.
Finding a client willing to pay you what you're worth is the tricky part.
3- Fight the temptation to bargain
A win isn't guaranteed just because of a good relationship; the contract terms are just as important.
Because of their scale, large firms can withstand and recuperate the loss they incur when entering into a partnership. However, offering discounts to attract employment is less feasible for many freelancers.
Assume you've established a standard rate of $50 per hour. Dropping the price to $40 may be necessary to attract clients or secure a project you're passionate about.
However, it communicates the impression that your work is of lower value than it should be. Even as you gain expertise, it is difficult (if not impossible) to raise your prices to their genuine buy-in online freelancing platforms, where potential clients may see your previous rates.
By charging by the hour,
You can customize your services to match the specific needs of a customer or project. You'll have an advantage in comparable debates in the future.
Fixed-rate projects are very popular with clients because of the stated pricing and scope of work expectations.
If you wind up working more hours than you expected, you will receive a set of deliverables with no danger of overages.
Clients concerned about the number of rounds of modifications necessary to arrive at a final product that they can be proud of will appreciate this feature. (Of course, this also implies that you'll be responsible for any time overages that occur during the process.)
you can avoid lowering your price by providing more for the same price. You may think this is a bad deal, but it's as simple as figuring out new methods to charge for the effort you're already making for solving the problem.
Creating a portfolio of your sources is a straightforward approach to add value to your work and deliver it to clients. You keep your premium pricing, and your customers get better value for their money because of it.
Some scenarios necessitate that you offer a discount, regardless of whether you have a fixed pricing.
Set your criteria ahead of time to reduce the likelihood of these occurrences and ensure that they are uniform. Also, only provide reductions if they come with a clause stating that you will recoup the savings on future projects.
You may offer discounts for new customers who bring you a unique opportunity or local clients who save you money on travel expenses. You may also offer discounts to first-time customers to commemorate the beginning of a new business relationship.
4- It’s best to stick to a rate that’s within reason
A formula known as the minimum acceptable rate can be used to estimate your freelance rate with absolute certainty (MAR). Calculate your minimum reasonable rate using this formula:
MAXIMUM AVERAGE REVENUE (MAR) is calculated as follows:
In the end, you'll have to pay your taxes. We will refer to it as the Acceptable Minimum Rate with Taxes (MART) for discussion.
MART is equal to MAR multiplied by the applicable tax rate.
MAR and MART can be illustrated with the following example. It's reasonable to assume that you have $40,000 in living expenses and $10,000 in annual business expenses (such as internet service).
Working 40 hours a week and taking one month off a year sounds like a good idea. At 40 hours a week, you'll be working for 48 weeks out of the year. Based on this data, your MAR is as follows:
To calculate the MAR,
Divide the total amount by the number of months in the year.
($50,000 / 1,920 = $26.04 in MAR calculations.)
Assume that the self-employment tax rate of 15.3 percent includes your income taxes. That is around 30% after other company charges are subtracted most of the time. Thus,
When multiplying by.30, the result is $33.85.
In this case,
The minimum acceptable hourly wage is $33.85 to cover all of your company and personal expenditures. Because of this, it leaves little opportunity for holiday spending, presents for loved ones throughout the holidays, or other forms of financial planning.
Your expenses should be adjusted in such a way that they reflect your spending habits, retirement savings, and other financial priorities.
5- Don’t waste your time arguing with the wrong people
The temptation to treat every prospective customer like a prince or princess during the relationship-building and negotiation is strong. However, the price of doing so can be high.
A common complaint from freelancers we work with is that they spend a lot of time pursuing new clients to lose them at the last minute.
As you begin to court a new potential client, consider the importance of both pay and value when deciding how much work to put into them.
Pay is the amount of money you can expect to earn once the contract is signed. If the payoff is higher, it's easier to justify investing more time and effort in negotiations. More challenging to define, value can refer to a client's appreciation of your work or enthusiasm for the project.