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Contracting: 5 Hacks for Negotiating High Rates

24th June 2016

Article written by:

iContract

Here are our tips for negotiating higher rates:

 

1. Determine the lowest paid rate you’ll accept

Know what your bottom line is. Do not enter into negotiations without knowing the lowest paid rate you are willing to work for.

2.  Ask your client for their budget

Stop thinking that money is a taboo subject; it’s not – and you need to get out of this mindset if you want to succeed as a contractor. Nothing is more valuable in negotiating rates than getting the client to reveal their budget and/or the rate that they would be happy to pay. Just ask them.

 

Some clients may not give you a number to work with, but they may give something away in answering the question. Anything they offer can be helpful for you to work out what they’re willing to pay – read between their lines.   

3) Charge per project or per day

Working by the hour limits your working potential. It creates a barrier that you cannot go beyond. Say your hourly rate is £50 and you work ten hours per day. Under those circumstances you can never make more than £500 per day. However, if you charge by the project or per day, your earning potential is theoretically infinite (as long as you can complete the work). Similarly, working for an hourly rate gives the client far too much to think about in terms of their perception of value and they could start to micro-manage your time (which is something you definitely don’t want).

 

4) Start high and work your way down

Negotiating is a part of business life for many people. You should accept that everybody wants to receive more for paying less.

 

Always propose a rate higher than you would and leave room for haggling down to a rate that is acceptable for you. This may seem bold, but you are simply getting ahead of the curve. If the client can haggle you down to a number you would have accepted anyway, they’ll feel happier they’re within their budget and you will still be happy with the agreed rate. It’s win-win for everybody.

 

5) Negotiate based on your client’s perception of value

Too many contractors work from the perspective of what they think their services are worth when in reality they should be doing the exact opposite. Your opinion isn’t important when it comes to negotiating rates — it is what the client thinks that makes all the difference.

 

For more information on contracting, check out our contracting resources and be sure to pre-register with iContract for when we go live soon.