So you have started working as a freelancer, and you have gotten potential clients. Now you need to make a quote for the project. How much do you charge?
This is perhaps your first project, and you are afraid to offend the client if you over-charge.. Don't be. Here are some tips and considerations you can ponder before and after sending a quote.
Things to consider before sending the quote
How badly do you need the project?
Is this just a project to pay the bills, or is it a fun/interesting project to do? If so, consider this as a factor to lower the price if the client asks for it. (Which they most likely will).
Are you using subcontractors?
Can you undertake the entire project yourself, or do you need to use subcontractors for some areas? If you need to use subcontractors, you should make sure that you have gotten the lowest price possible from the subcontractors before sending the quote. You should also add some extra margin of profit to your quote, as you will most likely spend some hours communicating information between the client and the subcontractors.
Is the client a good name to have on your reference list?
This is something a client will say to get you to lower your quote, but it is also one of the few things that is actually worth considering. If it is a big corporation, having their name on your homepage or resume will Definitely be worth it. Maybe you will even get references from the client if they are happy with your work. Definitely something worth considering.
Is it a big company?
In that case they will most likely have a price policy, and if you have not been informed by your contact person, you should get in touch with the company and enquire if they have a fixed hour rate for freelancers. This will prevent them from using this as a part of the negotiating.
Things the client most likely will say
"Other contractors charge less."
Good reason, but the client wanted a quote from you for a reason. Your reply will of course be that your competitors are not as skilled/professional as you. The ball is now in their court. You can tell the client that the competitors try to dump the price because they want more clients, but they cannot give the level of attention and/or quality you can. The competitors most likely use the same amount of time as you, but your work is better.
"We will have lots of projects in the future, so can we get a lower price?"
This is one of the most common comments, the clients always believe they have a fleet of projects waiting, and if you get this project and do a proper job, you will get them all. This is usually not true. Either the client is lying, or the projects rarely become reality. You can offer the client that future work will of course be of a reduced salary, but you cannot lower your price for projects that might or might not become a reality.
"The price is much higher than I imagined"
This may or may not be true, but a classic answer that from the clients point-of-view is the beginning of a negotiation. Here you will have to take several things into consideration; Is the client new in the business for your kind of service? If this is true, then the client might be telling the truth, and you are close to loosing the client. If the client has hired people in your profession before, then it is most likely the only response they have to your quote, and you can begin negotiating.
"We only pay contractors xxx per hour"
This basically only applies to big corporations which will have a set price-policy for freelancers/subcontractors. You should have been informed of this in advance, if not, then you have a potential problem.
If your quote is set by a certain amount of hours, you can tell the client that the amount of hours is just set with your usual hourly rate, and the end price is a fixed price for the project. You can tell the client that if they are not willing to pay the amount you quote them for, that you can do the project by the hour rate they request, but the hours you set in your quote will rise to the actually amount of hours you spend on the project.
Things to consider before negotiating
How much do you want the project? Is it a fun project to do, or is it simply another job to earn some money to pay the bill?
Are you gonna undertake the project alone, or do you need subcontractors? If you need to use subcontractors, you will most likely not get a lower price from them that you all ready had (see the paragraph at the top). If you lower the price, you are only gonna lower the profit you are gonna make.
Is it a large corporation? In that case they will most likely have a price policy, enquire with your contact person in advance.
The client accepted the quote immediately!
Amazing, simply amazing. This rarely happens, and it makes you wonder if you should have set a higher price. Don't think like this. This is an indication that the client might be a good client, which knows the rules of the game, but is happy with you and your quote. Be happy, you saved some time, and you can begin working and anticipate the payment on time.
The client refused!
Don't worry, this happens, and it will happen again. Don't let it discourage you, as you gain experience, you will fine tune your quotes and your negotiating skills, but no matter how skilled and experienced you get, you will always encounter clients that cant afford your prices. Just move on, and attack the next project/client with the same energy, remembering what you've learned.
Lars Koudal is a new media freelancer with more than 10 years of experience working for big and small companies around the world.
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