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  • Diana Schneidman

A counteroffer to consider when negotiating your fee

In tough times, prospects may offer to hire you for freelance or consulting work but only at a rate below your usual price, claiming they can’t afford to pay market rate.

The experts out there say never to accept a lower hourly fee after you present a figure because you are devaluing your own work. They recommend not cutting a flat project fee without eliminating some aspect of the work. Not only does this preserve the message that your price is consistent with the value you offer and not a mere whim, but it frees up your time to find higher-paying work.

Still, lowering your price is a temptation when work is slow and you are just starting to freelance or consult. And since there is no union or industry-wide price setting, we are each free to do as we wish.

Here’s an alternate offer: Suggest working for a lower fee but require full payment upfront. After all, because the sum at risk is low relative to the work time required, there is less downside to you if they walk up front.

And since the prospect’s argument for a lower price is essentially that they are can’t (or won’t) pay full rates, they may be telling you they are a poor credit risk (or moral risk). The financial challenges they admit to should warn you that they may be unable to pay promptly when the project is completed.

It is always advantageous to structure payment so you receive as large a share as possible as soon as possible, but this is especially true in a yellow-light (caution!) scenario.

Originally posted 2-23-09

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