> “bad-mouth other consultants to help myself get work” jerks
Those guys... Second time I ran into one of those, I decided to quit freelancing forever. The whole perception of freelance consulting being liberating from office politics instantly disappeared, and I realized that offices may actually tend to be far more civil and professional. * but depends on your city.
I have a small, but profitable consulting company working for clients across Europe and the US. If there's one thing I've learned, it's that if some of the first words out of the client's "how much do you charge?", it's an awful contract. They're focusing on cost, not value.
I don't charge as much as top-tier consulting firms, but I do charge more than most freelancers. Clients generally know who I am by reputation or referrals and they're happy with my work. For clients who want to nickel-and-dime the contract, it's miserable.
Still, my favorite was one client who wanted to pay me far less than what I ask and demanded a fixed bid on a small, two-week contract. I agreed and got finished in three days. He wound up paying a lot more for my work than if he had agreed to my rate up front. I charge more, I get done faster. And that's with documentation and tests.
So yeah, don't undercut yourself by charging too little and don't hurt yourself by accepting contracts with those who don't appreciate your value. It's all grief in the end. I walked away from one year-long contract which offered a reasonable rate, but still less than what I charge. To this day I still don't regret that decision, though many would have compromised. My very next contract was my normal rate on a rolling contract. It's been less than a year, but I've already earned more than I would have with the year-long contract and the company is very happy with my work.
(Plus, I used to sell cars and when you sell cars, you quickly learn that the happiest customers are the ones who pay the most)
If they don't care about costs, they won't outsource... If you are not in the same country (face to face), you'll always be somewhat valued on price...
Charge less the first time, charge some more the next time (if their happy)
If they're outsourcing to save money, I don't want them as a client. As I've said, if they're pinching pennies, they're not focusing on the right area or they're so cash-strapped that they can't focus on the right area. Either way, I don't want that work and unless one of my associates is in a bind, I don't want to make their life miserable either.
And no, I'm not valued on price because even if the clients are in another country, they already know who I am. I been deliberate marketing myself to make that happen. Two books, conferences (including keynote speeches), lots of open-source code, and so on. That's part of what sets me apart from many others in my field: nobody knows who they are. It doesn't mean I'm better than them; it means I'm better known than them. (I apologize if that sounds arrogant, but this has been a deliberate, multi-year strategy to get me where I am).
> Charge less the first time, charge some more the next time (if their happy)
I doubt if that will work. What if they were happy because they got quality output for less money? How would you now go to them and say that I gave you a discount the first time around and now you have to pay the full price? If you did not make it clear up front, you will have a very unhappy client.
I think it's incorrect to assume that everyone hires consulting companies to cut costs. Some folks hire them because they do not want to build IT team. Some folks hire them because they need some work done for the quarter BUT won't be needing them on permanent basis. In such cases, it's not about the cost but paying right amount of money to get their work done.
And sometimes they outsource because it's hard to find expertise in a particular area, or they have a staffing shortage. I am regularly contacted because of that.
That's a totally different story, that's true. My explanation isn't a 90% case.
But if you're experience is building websites and etc.. You have less value to provide then someone who can come over and take a business movie with a drone :)
> Charge less the first time, charge some more the next time (if their happy)
Great in concept but I've found in 4 years of freelancing (.net development) that the assumption is that the "foot in the door" price will always be your price going forwards and that the renegotiations just never happen. Of course, as always, YMMV.
I have had success in raising rates, but you have to be prepared to walk away. I typically raised rates yearly, but also have raised rates after the end of the first contract.
Typically I do it over email, and say something like: "As of Jun 2015, I'm raising my rate to $XXX. Please let me know if you have any questions or concerns." Typically I raised the rates $10/hr/year, but that depended on starting rate.
Note! You are more valuable to them after the first engagement because you are now a known quantity, so you should be paid more.
But, as stated above, you have to be willing to walk away if they can't or won't meet your new rate. I've lost clients as well.
EDIT: I've freelanced for about 8 years in total (two different time periods).
I freelanced for years before starting my current venture and this approach NEVER worked. I know lots of other freelancers and it has not worked for them either, as far as I know.
Once you establish a rate with a client, even if you make it plain to them that they are getting an "introductory discount", it is very difficult to get them to pay more next time.
Many clients will move on to another contractor, who may charge as much or more than you are seeking, rather than agree to pay you more than what they paid you the first time around.
A solid contract should be at the top of the list. At the very minimum it should cover exactly how your work, the responsibilities of both parties, what's included and not included in the scope and exactly how/when you get paid. Then, make sure your client and all their employees understand the terms.
Thanks for sharing -- great ideas. I've often heard the admonition to charge more.
I have a relative who owns a photography business. After years of taking pictures at family events for free he decided to start charging. How do you balance favors for friends/family with the need to maintain your professional persona and your business?
There's something charmingly robotic to me about the removal of the 12 (things) and 12 (years), which is appropriate according to the rules but ruins the title. Maybe the best way for AI to regularly pass the Turing test is for humans to continue behaving increasingly automatically.
18 comments
[ 3.5 ms ] story [ 50.3 ms ] threadThose guys... Second time I ran into one of those, I decided to quit freelancing forever. The whole perception of freelance consulting being liberating from office politics instantly disappeared, and I realized that offices may actually tend to be far more civil and professional. * but depends on your city.
I have a small, but profitable consulting company working for clients across Europe and the US. If there's one thing I've learned, it's that if some of the first words out of the client's "how much do you charge?", it's an awful contract. They're focusing on cost, not value.
I don't charge as much as top-tier consulting firms, but I do charge more than most freelancers. Clients generally know who I am by reputation or referrals and they're happy with my work. For clients who want to nickel-and-dime the contract, it's miserable.
Still, my favorite was one client who wanted to pay me far less than what I ask and demanded a fixed bid on a small, two-week contract. I agreed and got finished in three days. He wound up paying a lot more for my work than if he had agreed to my rate up front. I charge more, I get done faster. And that's with documentation and tests.
So yeah, don't undercut yourself by charging too little and don't hurt yourself by accepting contracts with those who don't appreciate your value. It's all grief in the end. I walked away from one year-long contract which offered a reasonable rate, but still less than what I charge. To this day I still don't regret that decision, though many would have compromised. My very next contract was my normal rate on a rolling contract. It's been less than a year, but I've already earned more than I would have with the year-long contract and the company is very happy with my work.
(Plus, I used to sell cars and when you sell cars, you quickly learn that the happiest customers are the ones who pay the most)
Charge less the first time, charge some more the next time (if their happy)
And no, I'm not valued on price because even if the clients are in another country, they already know who I am. I been deliberate marketing myself to make that happen. Two books, conferences (including keynote speeches), lots of open-source code, and so on. That's part of what sets me apart from many others in my field: nobody knows who they are. It doesn't mean I'm better than them; it means I'm better known than them. (I apologize if that sounds arrogant, but this has been a deliberate, multi-year strategy to get me where I am).
I doubt if that will work. What if they were happy because they got quality output for less money? How would you now go to them and say that I gave you a discount the first time around and now you have to pay the full price? If you did not make it clear up front, you will have a very unhappy client.
I think it's incorrect to assume that everyone hires consulting companies to cut costs. Some folks hire them because they do not want to build IT team. Some folks hire them because they need some work done for the quarter BUT won't be needing them on permanent basis. In such cases, it's not about the cost but paying right amount of money to get their work done.
But if you're experience is building websites and etc.. You have less value to provide then someone who can come over and take a business movie with a drone :)
Great in concept but I've found in 4 years of freelancing (.net development) that the assumption is that the "foot in the door" price will always be your price going forwards and that the renegotiations just never happen. Of course, as always, YMMV.
Typically I do it over email, and say something like: "As of Jun 2015, I'm raising my rate to $XXX. Please let me know if you have any questions or concerns." Typically I raised the rates $10/hr/year, but that depended on starting rate.
Note! You are more valuable to them after the first engagement because you are now a known quantity, so you should be paid more.
But, as stated above, you have to be willing to walk away if they can't or won't meet your new rate. I've lost clients as well.
EDIT: I've freelanced for about 8 years in total (two different time periods).
Once you establish a rate with a client, even if you make it plain to them that they are getting an "introductory discount", it is very difficult to get them to pay more next time.
Many clients will move on to another contractor, who may charge as much or more than you are seeking, rather than agree to pay you more than what they paid you the first time around.
This has saved me an incredible amount of pain.
I have a relative who owns a photography business. After years of taking pictures at family events for free he decided to start charging. How do you balance favors for friends/family with the need to maintain your professional persona and your business?