Archive for Rates
It’s always best to negotiate from a position of power. You must ask yourself ‘Can I walk away from this deal?’. I find many people get locked onto an opportunity and so it’s tough to let go. I was recently discussing a contract opportunity for myself and I heard such things as ‘That rate is higher than the client is comfortable with’, ‘Other candidates have lowered their rate because of the economy’, and ‘This is our standard rate’ to name a few. Many people in my position would have went along with those comments and lowered their rate. If you know me by now, you know I didn’t.
When someone tells me about an opportunity they have and what they want from the client, I usually ask ‘What if they say no?’. Often times I get a blank stare. In many cases, they will eventually adjust their rates downwards to accommodate the client’s ‘policy’. There’s nothing wrong with making adjustments but you should never lower your rate or make other concessions without removing something from your service, or getting something else in return from the client.
Negotiations can tend to get personal. The egos can get involved. Here’s my take: You have your standards and the client has theirs. If you can’t come to an agreement that’s okay too. They have their policy and I have mine. The slippery slope is if you lower your standards for one client you will tend to do this in the future as well. If you stick to your guns, lose an opportunity or two but still end up in great shape, it will encourage you and validate your courage.
As I talk about in my e-book, it’s good to be prepared when you start to negotiate your rate at the beginning of a new contract. You should have a low, medium and high rate prepared. Low is what the lowest absolute rate you will accept, medium is what you’d be happy with, and high is what you’d be really happy with.
But before you negotiate there are many other things to consider which affect your ability to get the rate you want. Some of these you might not even be aware of but they come across in your discussions.
Hopefully you have researched the rates for your skill and have a general idea of what you will get. A rough ballpark could be $75-95 per hour considering that the larger consulting firms might charge upwards of $150 per hour.
Other issues to consider are:
- Are you comfortable asking for these types of rates?
- Can you walk away from the negotations without getting the contract?
- How much debt do you have?
- Have you practiced this out loud with a friend?
- Do you believe you can handle the technical requirements of the project?
- Do you really want to get this contract?
If you’re not comfortable and confident with these rates it will definitely come across in the negotation. If you are in desperate need of a contract because of debt or you haven’t worked for a while, it will come across. If you don’t think you can do the job, it will come across.
The last issue is interesting. You have to show that you would like to help the client, but you can’t come across as desperate. You can take or leave the contract, but you show genuine interest in helping them out. Either way is fine.