One of the things that he taught me years ago, but bears repeating now: don’t negotiate with yourself.
How many times have you come to the pricing discussion and balked. “If I quote that price, they’ll never pay it,” you think to yourself. “Maybe I should reduce my bid.”
Stop negotiating with yourself.
Allow me to repeat that: stop negotiating with yourself.
Establish Your MSRP (Manufacturer's Suggested Retail Price)
Pick a number that you’re comfortable with and stick to it. Write your baseline rates and market rates on a piece of paper and tack it to the wall. Know from experience that the market for Project X ranges from $1,000-$1,200, but that your bare minimum is $800 just to cover your hours. Stick to those numbers. Trust your experience. Know that the market rates are the equivalent of the MSRP on a new car; would your car dealer open negotiations at their bare-bones invoice price? They always leave room to negotiate.
Do You Negotiate?
Some contractors argue against negotiation. Your rates are your rates. Would you barter with the plumber or your mechanic? Most people don’t, yet they wouldn’t hesitate to try to reduce a freelancer’s rates.
Let’s assume that you do open the door to negotiation. If you offer them a cut rate to start with, what do you do when they want to negotiate? You have no wiggle room. Establish your baseline, and if clients think that number is too steep, then and only then can you begin to negotiate your price with them.
Let’s say that your gut baseline price is $1,000, to use a nice, round number. You know that this price will not only cover your hours, but will also give you a small cushion of profit. But you’re worried that maybe, just maybe, the client won’t want to pay $1,000, so rather than letting them come back to you with a counter-offer, you submit a proposal for $800, giving you bare minimum coverage for hours alone. By negotiating with yourself and playing the “what if?” game, you’ve backed yourself into a corner.
So trust your judgment, establish your MSRP and stop negotiating with yourself.
BTW: There's an entire chapter on negotiating in Ilise Benun's new book, The Creative Professional's Guide to Money, which you can pre-order now, for yourself or give as a gift to your favorite creative professional who struggles with these issues.