As a freelancer, one of the most important things you can do is learn how to negotiate your rates.
After all, if you don’t know how to negotiate, you could end up leaving a lot of money on the table. Fortunately, negotiating your rates is not as difficult as it may seem.
With a little bit of preparation, you can confidently approach any potential client and get the pay you deserve. Here are a few tips to help you negotiate your freelance rates
Why you should regularly negotiate your freelance rates
If you’re a freelancer, it’s important to regularly negotiate your rates. Here are the three biggest reasons why.
To stay competitive
If you don’t keep up with the going rates for your industry, you’ll quickly become uncompetitive.
Whether you realize it or not, how much you make is tied to your ability to perform. If you’re a graphic designer and you can’t afford certain design software that are industry standard, you aren’t likely to get certain types of jobs as time goes on.
Similarly, larger scale clients with more advanced needs will question your ability to get them the results they need if your going rate is much lower than other freelancers with similar skills.
To account for inflation
The cost of living goes up over time, by about 2.2% per year, so your rates should too.
If you aren’t familiar with inflation, that’s a great place to start.
Investopedia defines inflation as https://www.investopedia.com/terms/i/inflation.asp :
“Inflation is a rise in prices, which can be translated as the decline of purchasing power over time. The rate at which purchasing power drops can be reflected in the average price increase of a basket of selected goods and services over some period of time. The rise in prices, which is often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. “
You got all that?
Simply put, the average price of things you want to buy goes up each year, so you’re $5 you had last year is effectively worth $4.89 this year.
Ultimately, you should be increasing your freelancing rates by a lot more than 2.2% per year if you’re delivering great work. But at minimum, that’s what you need to be charging to keep up with inflation.
To reflect your experience
As you gain experience, your work quality will improve and you’ll be able to pass along that knowledge to your clients.
Since you’ve put in the hard work to get more efficient and effective with your work, it’s only fair that you’re compensated more for these improvements as well.
Think about a traditional job role. If an employee did excellent work above and beyond for 3 years straight, and they weren’t thanked or compensated extra for their great work, they wouldn’t stick around.
The company would want to increase their salary or give them a bonus as a way to reward them, but also to keep them around for their beneficial work.
You should evaluate how much you’re learning and improving over time and make sure your rates are keeping up with your growing skill sets.
6 key tips for successfully negotiating rates as a freelancer
For some of you, negotiation is a dream come through and something that you enjoy doing often. If that’s the case, lean into it and embrace that side of yourself.
For the rest of you, negotiating a new rate for your freelance work can seem daunting and intimidating.
No matter which camp you’re in, the following 7 tips will help to polish your negotiation skills and make sure that you’re getting paid what you’re worth as time goes on.
Let’s dive in:
1. Find a way to get into a calm state
When you are calm, you are able to think more clearly and make better decisions. You are also more likely to be able to stay calm during the negotiation process, which can help you get the best possible outcome.
In addition, being in a calm state can help you build rapport with the person you are negotiating with and create a more positive overall experience.
2. Calculate your ideal rate ahead of time
As a freelancer, it’s important to calculate your ideal rate before negotiating with potential clients. This will ensure that you are paid fairly for your work and don’t end up undervaluing yourself. There are a few benefits to doing this:
1. You will have a clear idea of what you should be paid, based on your skills and experience.
2. You can use your ideal rate as a starting point in negotiations, and then adjust it up or down depending on the client’s budget.
3. Think about the client’s needs
As a freelancer, it’s important to think about your client’s needs when negotiating rates.
By understanding your client’s budget and what they need to get out of the project, you can tailor your rates to fit their needs.
This not only shows that you’re invested in their success, but also helps you to negotiate the best possible rate for your services.
4. Research the going rate for your services
When you’ve done your research ahead of time for the going market rates, you’ll show you’re knowledgeable.
Knowing the average rates for your field shows clients that you’ve done your research, and that you have a solid idea of what other professionals in your sector are getting paid. This puts you in a stronger position from the start because they know they can’t easily take advantage of your ignorance.
You’ll create room to move. If you research the highest rates for your field, you’ll have some leeway to negotiate from. This will seem more realistic, and give you a better chance of getting closer to what you deserve.
It gives you a talking point. If you come up with a rate that’s lower than the going rate, you’ll gain respect by showing that you’ve considered all angles and know that you’re providing great value for money. This will make it easier to ask for what you deserve.
5. Prepare for the negotiation
You can’t get the best deal if you aren’t prepared. Rehearsing and researching will help you get the most beneficial rate for your work as a freelancer.
Too many freelancers go into negotiation unprepared. They wait to be asked for a price by a client, and then they scramble to find a number. Don’t do this when it comes to your rates.
Write down what you plan to say. Practice your pitch out loud. This will help you approach the conversation with confidence, which will make you more effective.
You probably won’t have long to negotiate your rate, so prepare yourself. Clean up your website to make it more presentable and readable. Clean up your portfolio, too. Make it easy for the client to see what they need to see.
This will give you more time to focus on the details of the agreement and pricing rather than explaining what you do.
6. Be willing to walk away
You need to be willing to walk away from a potential project if the rate offered is beneath your worth. You’ll often find that in spite of the client trying to push through a low rate, they’ll eventually be willing to meet you halfway.
People don’t like to lose. When you’re firm about your rates, and clearly indicate that you’re not willing to meet the employer there, they’ll realize their goal of getting the work done with you at their discounted rate isn’t worth it, and they’ll either meet your number or move on.
As a freelancer, it is important to know your worth and to negotiate the rates you deserve. Do your research, don’t be afraid to ask for what you want, and be prepared to walk away if you don’t get it. With a little practice, you will be able to confidently negotiate the rates you deserve and get the most out of your freelance career.