If you're a freelancer, the chances are that the prospect of negotiation fills you with dread. When we hear that word, a pretty clear and consistent picture is conjured, and it goes something like this.
You state your price, they laugh and counter with something far lower, you gulp and wish you'd never gone in so high (even though it wasn't) and reluctantly agree to work for pennies.
That's the perception, but there's no reason that it needs to be the reality. Life as a sole business owner is tough enough without having to fear that any conversation about money is doomed before it begins.
But if you shy away from discussing money, you'll probably miss out on lots of opportunities to charge more effectively and ultimately command a higher rate.
Establish a bare minimum
The first time someone asks you how much it costs for a logo, you might experience a frisson of excitement followed by panic. Usually, the price that we pluck from the sky is about as much as we feel comfortable asking for, without risking the other person baulking and rescinding the offer in disgust. That's not an effective way to price any kind of creative work and certainly doesn't make it financially sustainable.
Instead, as a bare minimum, you need to be fully aware of what your overheads are and have a feel for how long the piece of work might take. Whether you opt for an hourly/daily rate, a flat/project fee or a value-based approach, without first knowing what a realistic baseline is, you stand to make freelance life harder than it needs to be.
The good news is that you can work all of this out before speaking to any client.
The first and most challenging part of the process of charging effectively is calculating a base rate that honestly and adequately compensates you for your time and skills. Often, that first assessment of the numbers is daunting as they seem so large. Don't let that put you off. Your annual salary expectations need to be based on the assumption that you won't be working every single day of the year. You should also account for the tax that you'll pay on your earnings and the savings you'll need to make along the way.
For a swift ballpark figure, you can use a tool like this, but be sure to drill down those numbers to make sure you're accounting for all outgoings.
Understand the value of your work
As a creative freelancer, quite often, you'll be in a situation where a potential client dramatically undervalues your work in a monetary sense. Don't take it personally and don't see it as a fixed position. There is a broader cultural perception that you're up against here and no doubt you've experienced it before. Non-creatives often seem to frame what you do as "hobby-ish" or somehow not real work.
One of the primary goals of any potential first meeting with a client is to help them understand the value of your work. Just because someone perceives a project as being worth X doesn't mean that they can't come around to it being worth Y.
Businesses spend money on things they value. As a freelancer, before you agree on a scope and price on a project, you've got plenty of opportunities to affirm what you're bringing to the table.
Learn how to ask the right questions
Before quoting anyone, it's crucial that you ask questions and listen carefully to the responses. If you ask the right ones, you can build the foundation to a successful project – both creatively and financially.
One method that you can try is the Three Whys – Why this? Why me? Why now? These questions should elicit detailed answers. Rather than merely responding to and quoting from a written brief, your client is being invited to outline the strategic thinking behind the project. The more you get an insight, the better you can understand the value that you stand to generate for their business. The deeper you get into this conversation, the more trust you can build.
Your relationship with the client throughout this process shifts from product provider to service provider. Think of services as being inherently flexible. Your role is to serve a client's needs in the best possible way. The more they trust you, the more likely they are to defer to your expertise when agreeing on a plan of action.
Another approach is to develop a discovery questionnaire. Focussing on the most important pieces of information from your point of view, draw up a list of key questions. These might cover the brand, the company's objectives and perhaps insight into past campaigns or strategies that have worked, along with ones that haven't. A discovery questionnaire should always include fundamentals like initial thoughts on budget and an idea of a timeline.
There is no right way to structure your quizzing of the client, other than to develop, over time, a strategy that works best for you. If you're only just starting, then experiment. Be sure to note down any snags that come up during a project, so you do better next time.
Get used to serving rather than selling
No one, I repeat, no one likes to be sold to. That includes your potential clients. Instead of selling to them, which soon creates the dynamic for those classic negotiations to take place, focus on serving. How can you help them to solve this fundamental business problem or challenge? How can you get them more customers, drive more sales, increase their social following or whatever it might be?
This is where concentrating your energy on asking questions ahead of quoting your rate is key. Through conversation and some gentle guidance, your client can start to figure out for themselves how valuable your insight can be. It might sound like a challenge if you're not used to it, but believe me, asking questions is far more effective than launching into a negotiation without the right information, as it helps to dispel any feelings of imposter syndrome that you might be battling.
It also shifts the focus from you to the client, who, at this stage, is the most important party. Remember that they like to feel that way, the same way you do whenever you're the customer.
Understand how important boundaries are for both parties
Once you have a solid idea of your rate, it's important to set clear boundaries. This will benefit both parties. Firstly, draft a terms agreement, which is a basic contract that anyone could read and quickly understand what the nature of your arrangement is. This document becomes the backbone of the project and isn't just about understanding what can't be done, but can also show where additional work could be considered or discussed. Any up-selling or change to the nature of your agreement needs to be included in an updated terms agreement.
Always aim to get this signed by both parties ahead of undertaking any work. Be sure to include details of the payment schedule, and once that first payment has hit your account, you should have everything in place to deliver great work at a rate that works for you and your client.
Just remember that it all starts with a conversation and that's way more appealing than a negotiation, right?
If you'd like to learn how to price your graphic design work step-by-step, then Alec is here to help you in Intern's new comprehensive online course, The Price is Right. For just £49.99, you get lifetime access to quality video instruction. Through a range of tasks, you'll calculate a rate that works for you, explore different pricing strategies, talk more about negotiation, terms agreements, invoicing and chasing payments. Enrol here and start charging sustainably today.