5 Negotiating Mistakes Freelancers Make
There are two keys to being a successful freelancer. One is to develop your skills and abilities to the point where you can get paid like a professional. Two is to convince people to actually pay you like a professional.
For most people, negotiating isn’t a natural skill. Haggling over money can make some people uncomfortable, while others may not know how to determine what their skills are truly worth on the open market.
Fair spoke to freelancers from a number of different fields to understand the negotiation skills they use to get the best rate for their work and some of the pitfalls they’ve experienced along the way. Here are five common negotiating mistakes that came up throughout our conversations that can be avoided to help ensure your bottom line always matches your talents.
1. Failing To Define Your Scope Of Work
This was the one piece of advice that came up again and again from every freelancer we interviewed. It’s important to remember that you’re not just negotiating for how much you’ll be paid for a particular job, but also for how much work is expected of you and how much time that will take.
Video editor Michael Engelken said that you should never accept a fixed rate for a project that has an open-ended time commitment, for example.
“You absolutely must have an ‘out’ date – preferably on a day rate that pays overtime hours,” Engelken said.
Naresh Vissa is the CEO of Krish Media & Marketing, a company that provides a range of web services, including website development and online marketing. He said that one of the most important ways to make sure that you’re not getting locked into a contract that demands too much from you is to be extremely detailed in what services you’re offering and what they will cost.
“What happens a lot in these bigger developmental projects is the client says ‘I want this changed. I want that changed. I want all of these changes,’” Vissa said. “Initially when I was getting started, it ended up costing more to do all of these changes and the project would extend by months.”
Vissa said he now breaks each project into phases with a detailed rundown of what each step will entail and how much it costs—all the way down to how many edits his customers can opt for in a given phase and how much each edit costs. For example, he’ll define one set of edits after phase one, two rounds of edits after phase two, etc.
“And then if you want additional edits after that it’s going to cost Z amount of dollars,” he said.
2. Not Communicating With Other People In Your Field
One of the biggest challenges that any freelancer faces is knowing what to charge a particular client and how to get the most money possible for a job without pricing yourself out of work completely.
Carita Rizzo is a freelance journalist who has written for Vanity Fair, The Washington Post and The Hollywood Reporter. She said that it’s important to speak with your colleagues, but to do so diplomatically.
“If any of my colleagues or fellow freelancers have worked for that client I ask them what the rate is. Not necessarily ‘their’ rate, but ‘the’ rate,” she said. “It’s probably one and the same, but you never know. It gives people room to say, ‘I hear they pay this,’ without divulging what they make.”
If, for whatever reason, you’re not able to communicate with your colleagues about rates, Paul Bromen, the CEO of HelpfulHabitat.com, a website that provides information on household products, suggested placing an ad asking for collaborators to respond with their rates.
“From this information you can triangulate [your own] rates,” he said.
3. Thinking You Can Only Negotiate For Money
Many freelancers that spoke with us said that they won’t negotiate their prices at all—but that doesn’t mean they can’t find other ways to compromise and work with a potential client.
“If you find you are getting pushback on your prices, make sure to communicate that a lower price means fewer deliverables,” said Stacy Caprio, founder of Accelerated Growth Marketing, which provides search engine optimization and search engine marketing services. “This way, you do less work and your client pays less, but they understand that they're not getting a discount; they are just paying less for less work. This helps your work stay valued, and allows clients to respect you and your prices.”
Ryan Dixon is the founder of Social Beings and specializes in content marketing and customer acquisition. He said that he never lowers his rate to work with a client, but that he will try to find other ways to add value to his services.
“Circle back to find out the customer’s pain points,” he said, suggesting you specifically outline how you’re addressing each concern to further outline the value you’re providing.
4. Treating Every Client The Same Way
It’s important to assess your relationship with each client to determine what sort of compromises you’re willing to make and rates you can charge.
There are dozens of factors that a freelancer should consider when assessing a client, ranging from a client’s size, reputation, personal history and even geography.
Vissa said his business is based in Tampa Bay, Florida, but he has clients from all over the country, and the client’s location can impact how he determines his rates. He said while a standard rate of $100 an hour might be considered normal in a place like New York or Chicago, it could raise eyebrows in smaller markets.
“That’s why you always want them to throw out the first number because I’ve noticed that with my New York clients, with my California clients, I can get paid a lot more money, even though I’m not located in those cities,” Vissa said.
And while you should be careful about lowering your rate, that doesn’t mean you shouldn’t sometimes work for less, said J. Garcia, a video editor and director.
“If I had a great-paying client that offers less money for a small project, I might accept given their history of paying accordingly,” Garcia said.
5. Being Afraid To Walk Away
Clients will often have a million excuses for why they can’t pay what you think you’re worth, but you only need one word to let them know that’s not acceptable: no.
No one likes to turn down paying work, but one of the strongest moves you can make as a freelancer is to walk away from a bad offer. Not only will it preserve your rate, but it can protect the rate for an entire industry if clients learn that they can’t get away with underpaying.
Engelken said it’s best to be blunt when you get an excessively low offer.
“Let them know that they can only find less experienced people with the rate they are offering,” Engelken said. “If they want someone who knows what they are doing then they need to be willing to spend more money.”
Rizzo said if you’re not getting paid what you’re worth, then what’s the point?
“I may do one assignment to show them what they get. After that it has to be worth the money,” she said. “I’m a lot happier watching TV for free than I am working for no pay.”