Discussing business is not the forte of many people, and negotiating a contract is one of the most odious tasks. For freelancers that are talented in their profession and like to concentrate their efforts in developing their trade skills, negotiating a freelance contract might be the least pleasant moment in the development of client relationships.
Here are some key tips on how to best reach a fruitful Freelance contract:
Have on hand all the facts and figures that can help you. The key to negotiating is to know your product, your skills and the market. Have clear objectives of what you want the end contract conditions to be. Have clear explanations for what you are asking for and for that you need to know the client’s BATNA (Best Alternative to a Negotiating Agreement). Understanding your client’s options if he does not agree to your conditions is as important as knowing your own BATNA.
Take your time and ask for help
Rushing is never a good idea, especially in business. The contracts signed in two minutes are poorly made and there is always someone who loses out. As not everyone likes to negotiate, we sometimes decide to sign quickly to end the discomfort and you might end up agreeing to something you did not want.
It is also important to ask for help. While you are learning to negotiate you may need advice from an expert on the subject. Perhaps you know what you want to get but do not have the ability to write in a manner that protects your interests and ensures that there is no room for doubt or conflict. Consider having your lawyer, notary, accountant or confident help you check what you are going to sign, whether it was written by you or the other party. Undoubtedly, legal and qualified help is very important and is the ideal way to protect yourself.
Help the client understand why you are the right person
Without being cocky you have to show why you are the right professional for the job instead of someone else. Talk about past accomplishments based on the skills that they are looking for. Show previous projects and quantifiable results that can be transposed onto the situation you are negotiating. It is always good to know what the current rate is for freelancers in your industry. Be honest about it. You might want to position yourself below or above this rate, but have a reasonable explanation prepared for that positioning.
Personal impression is important
When Prof. Deepak Malhotra (Harvard Business School) gives advice to students searching for their first employment, his first advice is to not underestimate first impressions. Most of the time in addition to having the right skills and right rate, the person hiring also needs to like you! Be respectful and find some common ground to create a more personal connection.
Show concern for your client’s interest
William Ury a negotiation expert, who co-founded the Harvard Program on Negotiation, has a very interesting Matrix to define the different approaches that someone can take when negotiating. His approach is based on the concern for my own interest versus the concern for the other party’s interest. See matrix below:
A Rooster approach would be to avoid the negotiation or the subject on pricing since it is a difficult subject.
A Taurus approach is where we have an intense concern for our self and no regard for others.
A Dog approach is about an accommodating approach where we give in and give whatever the client asks for. Here the client is always right.
Finally, the Owl approach is about targeting for mutual gains. We show concern for the client’s interest as well as ours. We look for the win-win approach. The Owl approach facilitates the accomplishment of your objectives in a productive working relationship with your client.
To apply this methodology we should be able to focus on interests rather than positions. Always ask WHY, Why do you want this? Consider the other person’s motivation, desires, fears which will reveal more than the position they are actually taking.
Something important to avoid is to talk too much. The ability to listen is fundamental to understand the other party’s interests. Also, listening conveys respect. Put yourself in the other person’s shoes and you will immediately connect with your potential client.
To be flexible during a negotiation requires some creativity. There are several ways of splitting a cake and you have to be aware of it when you enter the process of negotiation. If the client does not have all the resources you asked for, then you might want to present the option of working in steps or reduce some of the features that you wanted to give but might not be essential to the main objective.
Flexibility is also about being willing to change tactics during the negotiation. Taking an elegant break from the negotiation might be effective to reach your goals. You might suggest that you will think about another way to deliver what the client is asking at the rate he is suggesting.
It is not only about price
When negotiating a contract with a client bear in mind that it is not only about the rate. Timeline is essential in a negotiation and it is often underestimated. Professionals are fast in accepting the client’s demand without realizing that it will put a big burden on them and might lead to disappointment. Issues to consider such as Deadlines, end products to deliver, tasks not included in the scope of the project and client requirements and obligations should also be negotiated from the beginning.
The key for a successful freelance agreement is to focus on interests of the parties and not their position. Of course this is all relevant once you have found freelance work.