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How Freelancers' Negotiating Skills Can Increase
Income From A Gig

Freelancers’ negotiation skills

Negotiating fees and rates is a key element to a successful freelance business. This guide will teach you how to negotiate as a freelancer and achieve your goals

How to Negotiate as a Freelancer

With many industries gravitating toward remote work, more people than ever before are becoming freelancers. Unfortunately, it can be easy to get distracted by the newfound flexibility you have and overlook critical business obligations.

Put simply, you will need to learn how to negotiate as a freelancer if you wish to get paid what you are worth. This negotiation guide has several negotiation tips that can help you along your journey. Let us dive in.

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Determine Your Minimum Acceptable Rate (Mar)

One of the most important aspects of negotiation is determining your minimum acceptable rate. As the name suggests, this is the lowest amount of money that you must earn to pay your ongoing expenses. For example, let us assume that between your mortgage, car payment, credit card debt, etc., you need to pay $3000 per month.

Now, let us also assume that you plan to work 40 hours per week, which translates into 160 hours per month. You would divide $3000 by 160 to find your minimum hourly rate.

In this case, it would be $18.75.

From here, you have a much better understanding of how much you should charge. If a project is estimated to take you four hours to complete, you should be compensated at least $75. Making less money than this will make it much more difficult for you to meet your monthly expenses.

When considering the above information, also ensure that you never neglect your tax obligations.

Avoid Giving Discounts For No Reason

This is something that new freelancers often struggle with. They attempt to provide discounts to their clients out of fear that their clients will walk away from the project altogether if they do not.

Unfortunately, this only facilitates unfavourable client interactions in the future. The people you work with may become accustomed to paying much less than they typically would when hiring somebody else to complete the same project.

They might also be unwilling to compensate you for miscellaneous costs, such as materials, travel, etc. When factoring in these extra expenses, you could end up with a drastically lower hourly rate. If left unchecked, a situation like this could also make your freelance career unsustainable.

Something else to consider is that people will only value your services as much as you do. If you provide much lower rates than what you should, your clients may begin to question the results that they will receive.

Stand Your Ground

A core pillar of expert negotiation is understanding how to stand your ground during the ongoing dialogue with your clients. There may be scenarios in which your client attempts to dismiss your proposal and explain why they should not have to pay a certain amount for your services. They might even attempt to convince you that you will never find clients who are willing to pay the rates you have set for yourself.

As you might guess, this is a situation that can easily become frustrating. Instead, you will need to remain adamant in your proposal if you have thoroughly researched and calculated it.

For instance, setting an arbitrary rate for your services comes with the risk of being well above what clients would typically pay. The evidence that you gather during your research can also be used to help justify the rates that you set.


Understand When To Walk Away

Sometimes, you simply cannot get through to the other party. Attempting to do so is a continuous waste of time and resources.

The longer you negotiate with individuals like this, the harder it becomes to walk away. Not only does this add more difficulty to your freelance career, but it can also cause you to miss additional freelance opportunities.

Having a strong understanding of when to walk away from the negotiation will help ensure that you use your time as efficiently as possible. Some of the most prominent warning signs that you need to step back include aggressive client behaviour, an unwillingness to compromise, and a refusal to listen to the justification for your rates.

Always Get Agreements In Writing Or Use An Escrow Service 

One of the most difficult aspects of becoming a freelancer is dealing with predatory clients who attempt to pay you less than what was initially agreed upon.

A common scenario could involve a client guaranteeing that they will pay a certain amount per project and then refusing to do so after the project has been completed. If you do not have the agreement in writing, you do not have any leverage to prove that you are owed a certain amount of money. For this reason, it is in your best interest to have contracts on hand for your client interactions. Using a freelancing platform for fixed price contracts is a good strategy. You can read more about this with this Upwork Escrow Article.

Your contracts should clearly define key details of the agreement. This includes the amount of time that will be spent on the project, the overall compensation, the deadline, etc. 

A client who refuses to sign a contract is someone you should avoid working with at all costs. More likely than not, they are attempting to take advantage of you.

Feel overwhelmed by your contract-related responsibilities? We have a tool that allows you to generate airtight contracts and agreements for your clients and ease the negotiation process.

Charge Per Project Instead Of Per Hour

Many freelancers find it difficult to correctly estimate the amount of time it will take them to complete a project. A wonderful way to solve this problem is through time tracking. When you understand how long it takes to complete a project, you can charge an accurate rate.

You can then use this rate for all your similar projects. Clients will appreciate getting a flat cost rather than a vague estimate of the hours it will take. In fact, many clients prefer to collaborate with freelancers who charge per project since they will not have to worry about the freelancer exceeding the estimated number of hours.

Not only does this help streamline the negotiation process, but it also ensures that you make as much money as possible if you use your time efficiently. Even if you spend less time on the task, you will still get paid for the time you would have spent. Just make sure you are not spending more time than you estimated to maximize your profits.

Illustrate The Value You Provide

You cannot expect to negotiate effectively if you do not convey value.

Clients who do not know you as a professional will need to understand what sets you apart from your competitors. One of the best ways you can do so is by creating a comprehensive portfolio. This should highlight all your best work, as well as the side projects that are worth showing off.

Your portfolio should also illustrate a certain level of diversity. This could go a long way when it comes to getting you additional projects in the future.

For example, let us assume that a graphic designer also included a page on their website dedicated to their side photography project. Clients who see this may be impressed with the content and higher them for additional projects in the future.

Always Start High

Many clients will accept the rates you set, but sometimes they will negotiate for a lower amount. In this case, you will want to start above what you are willing to accept. If the client accepts that higher amount, great! If not, you will still be able to negotiate the amount you need.

As the negotiation continues, they will feel as though they are making progress as your rate drops. However, the amount you agree upon is still likely to be higher than your minimum acceptable rate. When managed correctly, you will receive fair compensation and they will feel good about working with someone who is willing to compromise.

Do Not Be Afraid To Let Them Make The First Offer

For larger projects or projects, you are unfamiliar with, you might not be able to estimate how much you should be paid. In a situation like this, it is recommended to let them make the first offer.

This will help put things into perspective, and you can either accept it or ask for more. In some cases, their first offer may be well above what you would have received in other situations for the same type of work.

Understanding How To Negotiate Is Essential

Otherwise, you run the risk of falling far short of your goals as a freelancer. Fortunately, learning how to negotiate is a straightforward process that the guide above can help you with.

Want to learn more about what we have to offer? Feel free to contact us today and see how we can help. 

Author’s Bio: Geoffrey Mina has always focused on building technology solutions that solve real-world problems for real people. Over the years he is developed a reputation for optimizing strategy for efficiency and high-performance outputs. In other words, he is skilled at selecting the right strategic paths for organizations but can also mobilize workforces to execute action plans and critical initiatives. He is enthusiastic about building high-performance teams, inspiring them to push beyond their limits and perform at levels not thought possible.

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