Have the “Money Talk” Early, Avoid Wasting Time
Have you ever met a new client, got a briefing on a project, then spent a morning pulling together an estimate, only to hear, “Oh no, that’s way more than we thought.”?
Your estimate came in at $1,200 and they were thinking $400.
What a waste of time!
You could have avoided that by having the money talk before writing a detailed estimate.
But how can you give an estimate if you don’t go through all the details?
Try the “Similar Project Cost” Strategy
If you’re billing by the project, and you should, you have to work through the details and get it right. But that can take up a lot of time, which could be wasted if you have no idea what the client is thinking for a budget.
Here’s how to get around that.
Caution: you can do this if you have some freelancing experience. It may not work if you’re just starting on your freelance journey.
Once the client has told you about their project, think back to a similar job you did. Remember what you charged that time.
At an appropriate moment in the conversation, say something like this:
“I can’t give you an accurate estimate on this project until I’ve had more time to think about it, but I’ve done similar projects that have come in between $1,000 and $1,500. Is that the range you were thinking?”
Then, see what kind of reaction you get.
How to Deal With Client Answers About Money
Once you say that, you’ll likely get one of three answers:
If you’re lucky, they’ll say, “Yes, that’s what we were thinking.”
Or, it might be, “That’s a bit higher than we thought, but I’m sure we can work this out.”
Or, “Oh no, that’s way more than we thought. We need to keep this under $400.”
If you get the first answer, follow up by describing your Terms & Conditions, specifically payment terms, especially if you expect a deposit. Mention it now so the deposit doesn’t become an issue later.
If you get the second answer, it may be worth talking a bit more about what you put into the project and how your fees are typical for this type of job.
You want to make sure they’re onside. Then, have the Terms & Conditions conversation.
If you get the last answer, the $400 budget one, you can talk a bit more, but basically, it’s over. You’re not the right freelancer for them. They’re not the right client for you.
You Might Negotiate, But Only With Yourself
Let’s say you asked for $1,000 to $1,500, and they said our upper limit is $1,000.
That’s worth talking about. You’ll say something like, “I’ll work to make this project come in at $1,000 or under.”
This gives you the chance to tailor the project to the budget. Don’t give anything away. Make the project fit the budget. You don’t have to tell them how you’ll do this, but be very specific about what your estimate includes.
You Can’t Negotiate Big Differences
Let’s talk about the difference between $400 and $1,000 to $1,500.
In my opinion, it’s too great to negotiate. Of course, there are $400 jobs, but that’s not what this prospect described. You won’t be able to pare down a $1,000 project to fit a $400 budget.
Some people who like to haggle might say you could talk them up to $650, and you make the project fit a $650 budget.
No, not for me. First, I think you’re fooling yourself. You’ll be giving away a lot of hours. Secondly, even if the client said they’d pay $650, they’d be fighting you all the way because, in their mind, they’re still thinking $400.
The difference is too big.
The Moral of the Story: Talk Money Early
Think about it like this. You walk into a clothing store. You want to buy a shirt. You find some shirts you like. They all have price tags on them. That’s the “money talk”, right up front.
Within the first few seconds, you can decide whether or not you want to buy a $200 shirt. You get the money information early.
Once you know the price, you can decide. Yup, that’s fine, I like this shirt, and I think it’s worth $200.
Or, whoa, I like the shirt but didn’t think it would cost that much. You can spend more time talking yourself into or out of it.
Or, you could say, no, I didn’t think it would cost that much. I only want to pay $50 for a shirt like this. You’ll realize you’re in the wrong store for $50 shirts.
But you’re not going to the store owner and try to convince him to give you the $200 shirt for $50. You already know that won’t work.
Know Your Numbers, Be Firm
With a bit of experience, you’ll know how to estimate projects. You’ll have clients who pay your rates, so you know from experience what you can charge.
If you run into someone who doesn’t want to pay your rates, you’re simply not right for each other. It’s unlikely you’ll be able to talk them up very much, and you don’t want to start churning out bargain projects.
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