If you’ve done business with a person, or at least made an attempt to do business with a person, then you most likely know what it means to try and “earn business” with them. It’s the inevitable set of hoops that you find yourself navigating, in hopes that once you’ve proven yourself at the end of the game, you’ll get that contract signed.
In my time of doing business with many different people, and many different companies, I’ve come to the conclusion that this method of business making is not only wrong, but it actually harmful in the way that it makes you view yourself and your business as whole!
Of course, let me explain what I mean by that.
As a general rule, all businesses, either individuals or corporations, have to market and sell themselves. It’s only in this way that potential customers will look in their direction and decide whether to give them their business, or move on. This is what makes the working world go round, and it’s a model that has worked for a very long time.
Where this seems to go astray is in the creative world, mostly for freelancers and small creative firms. It’s become expected now that we (the freelancers and business owners) have to compete and earn the business of potential clients in a way that wouldn’t really fly anywhere else.
The Earning Business Ideology basically works by saying that as a freelancer, or business owner, I need to be willing to negotiate my terms, lower my prices, offer more for less, and basically make my deal shine more than the guy next in line, all in order to “earn” a contract with you. No longer am I earning business based on the work I do, the experience I have, or the caliber of product I produce. And that’s simply unacceptable.
The only things that should be needed to earn your business are a solid background of getting the job done, and a portfolio of work that shows you I’m the guy you are looking for. If I don’t have these things, it’s time to move on. It’s important to note that word travels fast, and if you do manage to earn a contract because you lowered your prices 50%, the next guy who wants something done will be quick to remind you of that, and it becomes very difficult to get yourself back up to an acceptable wage.
If you find yourself in a contract negotiation with a potential client, and it comes down to being hammered about finding ways to lower the cost while giving more, than you are walking into a bad deal. It’s much better for you self esteem and stress levels to simply walk away. I’ve had clients ask me how we can cut the budget, and I will usually find a line item in the project that we can take out. Remember, if they want to pay you less, than they are going to walk away with less. If they want more, they’ll pay more.
There are a couple of simple guidelines you can follow to get an idea of where things should stand in a contract negotiation.
DO be honest and upfront about the cost of things. If they want to know why it costs $2,000 for this project, consider taking the time to plot out an expense chart.
DO stand your ground on your prices. The minute you cave, it’s over. You’ll never get a full price project out of the client or their friends ever again. Of course, if they really want to spend less, you can remove line items from the project to keep it fair.
DO communicate with the potential client. Many times they simply don’t understand the technology behind things, and once you explain how it works they feel better about it.
DO your homework, and be prepared. Nothing will shatter your defense quicker than stuttering, mumbling, or general awkwardness when it comes to explaining how you do things.
DON’T bend over backwards to get the deal. Sometimes the simple act of walking away will bring that project right back to where you want it.
DON’T let the project stray from the contract. If you only budget for 50 hours of work, but the client is pushing for 80, let them know the budget requires a revisit. This is your livelihood!
DON’T do any work under the pretense of “getting your name out there” or anything along those lines.
DON’T start any project without getting a retainer up front. How much depends on you, but anywhere between 35% – 50% is a good way to keep them invested in the project.
DON’T assume anything. All deadlines, guidelines, and expectations should be clearly written in the contract. This protects you, and your client.
Of course there will always be special people that you are willing to take a hit for. Close friends, family members, long-time clients, etc. The important part is to use proper judgment, and if the deal feels one-sided, or even shady, then it’s best to let the project walk away. You’ll thank yourself for it later.
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