Read time: 4 minutes

Negotiating is often the most awkward part of freelancing.

Don’t think of it as a fight or a compromise. Think of it as setting boundaries and finding a way to be the best business partner you can.

Here I’m breaking down 5 things you need to know when negotiating your price:

1. Your floor
2. How to signal
3. Your leverage points
4. How & when to anchor
5. The structure of your quote

 

1. Your Floor

The lowest number you can accept is your floor. Do some math:

• Take your monthly expenses.
• Divide that by the number of projects you can anticipate taking in a month on average.
• Don’t forget to remove taxes.
• That’s how much revenue each project needs to bring in.

Adjust the math for time-based rates by estimating your average time booked monthly.

• Give each quarter its own number.
• For me, Q1 is always slow and Q4 always insane.
• Different industries keep different fiscal calendars, so consider your clients.

Haven’t been working long enough to have estimates?

• Ask a freelancer in your niche with 1-2 more years experience than you
• Prioritize work experience over money

If a project doesn’t meet the floor, it will cost you money to accept it.

 

2. How to signal

Things we need to signal to prospects:

• That we understand their need
• We know the value of our work
• And we’re open to negotiating

1. Show them you understand their need by explaining it back to them.

• Confirm you’re both on the same page
• Let them know you’re prioritizing their business goals

2. Establish your expertise and underscore the value of your work

• Reference similar projects you’ve done in the past
• Explain how you’ve helped other clients achieve their goals

3. Use specific language and provide ranges (or tiers) to signal that you’re open to making a deal.

• It’s a 50/50 chance the person inquiring recognizes the opportunity to work together on the cost-scope spectrum.
• Display your enthusiasm for their project, their goals, and their team. e.g. “This sounds awesome, and definitely the kind of project I specialize in. I’d love to figure out how we can work together.”
• Establish the variables. e.g. “Projects like this can really vary widely on cost depending on timeline, complexity, and how critical the execution is.”
• Provide a range or tiers. “Typically, something like this could be done for $4-6k on the low end if we keep it super simple to get the message across. On the high end, we could create something to really wow your audience and elevate the brand in the $15-20k range. Or something in the middle. I can build a proposal that has more details about what these tiers would look like.”
• This prompts the client to align themselves with a range they’re happy with, and sets you up to adjust your scope accordingly.

For time-based rates, if you’re flexible, also just use the word “typically.”

• e.g. “Typically, for 2D animation I’m $700/day. I’d love to learn more about your project and see how that aligns.”
• This prompts a discussion about scope and your cost.
• The “typically” language comes from a cold sales technique. Check out 30 Minutes to Presidents Club or follow Nick Cegelski.

 

3. Your leverage points

Money isn’t the only thing on the table. There’s also:

• Timeline
• Complexity
• Length
• Revisions…

I go more in-depth on various leverage points in my pricing course. You can come up with your own, too.

Remember: a deal isn’t a discount.

• A discount = offering the same product for less money
• Striking a deal = adjusting the service to meet the client’s budget

Know what you can leverage ahead of time so you can adjust your service to meet the client’s budget—without selling yourself short.

 

4. How & when to anchor

Old school sales wisdom says to never give the first number. But freelance creatives are usually better off setting their own anchor.

• When a client gives the first number, you’re more likely to say “yes” to a lower price (because they’re not going to offer the whole budget)
• Provide the first number (or range) to establish the anchor for value and set the client’s expectations
• If you don’t feel confident in putting a number on your value yet (comes with experience) find references for numbers by talking to other freelancers about what they charge
• If your goal is to take the client for every penny they’d be willing to spend, I recommend adjusting your mindset. They should always feel like they got more value than they paid for—which might mean raising their perception of your value.

When to not anchor? If you suspect the client has little-to-no budget, but you still want to work with them.

• If it’s a small company or even a small internal need at a large company, they’re probably working with limited resources.
• “I’d love to work with you. But typically the range for something like this can vary widely. If you can give me an idea of your budget, we can work together to build a solution that fits.”
• Or recommend them to Fiverr. Help them find a solution.

 

5. The structure of your quote

Can you itemize your own quote? What percentage covers the design phase? What percent is animation?

• I don’t typically itemize project-based quotes. It gives clients something to pick at and feel insecure over.
• BUT, I still know approximately how it breaks down.
• This helps me calculate the value I’m providing (or removing) during negotiation

 

 

Last note: Historically, artists get taken advantage of a lot. It’s easy to become paranoid.

• But, historically, artists haven’t had so many resources to understand the value they bring to the table. You have the power to stand up for yourself.
• Sleazy people are out there, but just don’t work with them again. Tell your friends. It’s a small industry. They won’t last long.
• Be chill. Give people the benefit of the doubt. Most want to pay you as well as they can.