Yes, you can negotiate as a consultant, temp, freelancer, or small business owner. Don’t assume that just because you’re not full-fledged staff, you have less influence. Don’t assume that since it’s just you v. a bigger company that you don’t have leverage. Don’t assume that a company can’t pay more, even if they insist they have no budget. Do not accept a lower status or accept constraints as fact. Take everything that is said as an opening to negotiate. Stay creative and look for alternatives that work for both of you. Listen actively to what your client is saying – what is their most urgent need, what is their first priority? Learn how to create flexible arrangements with the following seven levers so you can craft a win-win solution to your next negotiation:
Negotiate your base rate
However you quote your fee, there is an hourly equivalent for your time and effort on an assignment, and this is your base rate. Make sure that your base rate takes into account all of your costs, such as taxes, insurance, and the opportunity cost of not accepting another assignment. By being certain of your true base rate, you can negotiate the right price to begin with and not have to try and move a number upward, once you realize you didn’t factor in all the costs. You can also point out to the company how much of the cost burden they are saving – no employment taxes, no benefits, and their staff can focus on other things.
Negotiate your fee structure
Even though you need to know your hourly base rate, you don’t need to charge hourly. You can create a package fee that bundles specific services or charge a project fee that is tied to a specific assignment or get paid on results – e.g., the PR consultant who charges by media placement or the direct response marketer who charges for leads generated. If a negotiation gets stuck on price, you might play around with the fee structure. A client that may balk at paying $100 per hour may feel better paying $1,000 for a project – if you know you can deliver that project in 10 hours, it’s the same to you.
Negotiate for performance incentives
A client that negotiates hard on price might insist that payment be tied to results. But that shifts all of the risk onto you. The PR consultant paid on media placement still needs his or her client to be media ready and have high-quality ideas and marketing collateral the consultant can pitch. In order to share the risk but still be accommodating to your client’s concern for results, you could offer to split the fee between a guaranteed portion and a portion based on results – specific performance targets or a share of revenue gains or a bonus for early completion (sometimes the client’s main concern is timeliness!).
See 4 more levers to negotiate at the SixFigureStart blog:
Originally published on March 24, 2017 by SpeakerMatch Speakers Bureau