Negotiating Tips for the Freelance Professional

You may have heard the saying, “You don’t get what you deserve, you get what you negotiate!”  This is typically promoted by businesses that offer negotiation skills seminars.  They want you to believe that you need to be able to negotiate well, otherwise you will be “eaten for lunch in the dog-eat-dog business world!”

I have found that the vast majority of the business world is not so ruthless.  That being said, it is important to recognize that business relationships are different from personal relationships.  If you are a generous person by nature, that may cause problems in your business relationships, especially when you are striking deals. Business people are constantly looking for more efficiencies, and if you are going to make their life easier, then you may win the deal.  But at what cost?  If you are so burdened by doing things that really should be the other party’s responsibility, that will inhibit your effectiveness.  For example, if you are a social media manager, it would make more sense for your client to think of topics that are of concern to customers in their industry, rather than you learning their industry from the ground up.  Or if you are not charging what you should be, then your return on your business investment is suboptimal.  In both cases, you (and your family) pay the price.

However, just because you’re a “small” fish doesn’t mean you can’t negotiate good deals.  You just need to think a little bit about overall strategy before you enter into negotiations.

There is often a big difference depending on whether you are the client in the proposed deal.  In other words, if you are looking for office space, you may feel much more “in the driver’s seat” as compared to being the office provider to a prospective client.  A good rule of thumb for negotiating with providers is to get competing offers from at least three separate parties.  So for office space, get offers from at least three different offices or co-working spaces, and then you can use one offer to improve the other offer. For example, “Company X is offering discounted rates on the use of the copier, and I was wondering if you could do that too.”

In deals where you are going to be the provider, it can get more difficult.  First of all, you should figure out what are your minimum terms for the deal beforehand.  Having a good idea of what you want to achieve will allow you to figure out how to handle the discussion when it is going on.  Sometimes your emotions may get involved during the negotiation, and if you have your “walk away” point in mind, that will help act as a guidepost throughout the conversation.

For example, if you are just starting up your business, you may be willing to accept terms for a deal that you would not have if you were already established.  There are many things to learn from your first few engagements, so it would probably make sense to yield a bit in order to get business in the door.  Don’t worry about it negatively impacting future deals if someone references your prior generous offer.  Simply say that you gave the first few clients special deals to reward them for putting trust in you early on, but those deal terms are no longer available.

You should research who you are dealing with ahead of time.  Take some time to look at their background on LinkedIn or even on Facebook.  That may give you some interesting clues as to who they are as a person.  Also, research the company they work for.  How do your services fit into what that organization is trying to achieve?  Then tailor your offering to emphasize the achievement of those goals.

That being said, don’t assume anything before your negotiation.  The person or company may not be who you expected them to be.  You will need to be flexible in how you operate in the conversation.  Use open-ended questions (questions other than yes/no) to elicit responses that may or may not be in concert with your pre-conceived notions about the person or the company.

Try and create options for yourself ahead of time.  Think to yourself, “If they ask for X, then I can meet that need for X by providing Y and Z,” and assure them that this will still get them to the intended result for X.  It helps if you run these scenarios by people you know and trust ahead of time.  They will often suggest something that you didn’t think of. 

If something comes up during the discussion that you think you can accomplish, but are not quite sure how to do, it is completely permissible to say “let me think about that further and get back to you with a written proposal.”  The prospective client will appreciate the effort that you are looking to meet their needs instead of just spouting off something that sounds made up in the conversation to win their business.

Realize that most negotiations are not a “zero sum game”, meaning if I get something that means you lost something.  One plus one usually equals more than two in a business relationship.  Trying to “pull a fast one” in the negotiation usually doesn’t work for long term relationships, even if you manage to memorialize your “fast one” into a written contract.  A bad deal for either side will eventually crumble.  So look for balanced deals that will reap rewards for both you and your client over the course of a long term relationship.

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