Negotiation for freelances | Part 1 of 2: Preparation

by Tom Albrighton 11 January 2010 Freelancing

This is the first of two linked posts on negotiation for freelances. The second part can be seen here.

Negotiating the terms of a project can be one of the most difficult things for freelances to manage, after generating new business. For those without a commercial background, such as copywriters or graphic designers, hammering out a deal can feel a very long way from the comfort zone. It may become a source of real anxiety that taints the enjoyment of the ‘real’ work to be done.

That’s a shame, because negotiation is a skill that can be acquired by anyone. While some people have a natural flair for negotiation, the rest of us can still learn how to apply the basic principles, achieving a huge step forward from ad hoc, reactive or emotional approaches that deliver mixed results at best, frustration at worst.

Preparing to negotiate

The key to successful negotiation is preparation. Thinking through what you will and won’t accept, and your alternatives, puts you in a position of power right from the start. Without preparation, you’re entering a competition without really knowing the rules – so don’t be surprised if you don’t come out on top.

Your top line

Your top line is the best deal you could hope for in the circumstances. In an ideal world, what would you like to agree in terms of price, timescale, working method and other factors? Know this in your mind, or ideally write it down, before negotiation begins.

This might seem pointless – surely we all just want as much cash and time as possible? That’s true in a sense, but of course there are limits to both. Realistically, rates are dictated by your experience, the market and the economy, while timescales can never be completely open-ended. Psychologically, it’s much easier to aim for an absolute goal (“£x per day”) rather than a relative one (“more money”). After all, another £5 a day would be “more money”. Would that satisfy you?

Your bottom line

The converse of the top line is your bottom line: the worst deal you would accept. As with the top line, consider the minimum rate, shortest timescale and least convenient terms that you could live with. If the terms are worse than this – in any one aspect, or more – you’ll decline the project.

Take everything into account: the need to make a profit, opportunity cost (if you do this, you can’t work on something else) and emotional impact. Financially, it’s probably better to be busy than idle, but if the terms of the job make you feel miserable and used, the knock-on effects on your motivation just aren’t worth it.

The bottom line is an important safeguard against accepting the wrong terms in the heat of the moment. Like an automated ‘stop loss’ in investing, it protects you against your own fear and greed, setting a rational limit on what you’ll accept before you walk away. Crucially, you do this before you negotiate, rather than bumping up against it during the negotiation or (worse) realising that you’ve gone beyond it when it’s too late.

Your BATNA

‘BATNA’ stands for Best Alternative to a Negotiated Agreement. Your BATNA is whatever you will do if an agreement cannot be reached with your client.

Getting a concrete sense of your BATNA gives you a sense of perspective about the consequences of not getting the project. Instead of entertaining apocalyptic imaginings of going bust, losing your house and becoming a vagrant, you create a realistic picture of the outcomes that will result – and the actions you’ll take – if no agreement is reached. For example:

If I don’t get this work, I’ll…

  • …work on my other projects, but in a more leisurely and enjoyable way
  • …spend some time networking or marketing myself
  • …acquire a new skill
  • …do something outside work I really enjoy, and return to work refreshed

The point here is to focus on what will be gained if this opportunity does not proceed, not just what will be ‘lost’. As the Zen saying goes, ‘every exit is an entry somewhere else’. (And you can’t really lose what you never had.)

Working up your BATNA takes the sting out of your fear of loss, so you understand that missing out on this deal or project isn’t the end of the world – just another turn in the path.

You are now armed with the three key parameters of a negotiating position: your top line, your bottom line and your BATNA. Let the games begin!

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  • http://www.linkedin.com/in/jamesgurd James Gurd

    Nice article Tom. Preparation is the most important part of any new business opportunity, even if it is with an existing Client.

    You have to protect your own commercial interests and the danger is to ‘acquiesce’ to help out a Client and end up putting more pressure on yourself. Having gone freelance only 5 months ago I’m starting to understand the benefit of valuing your work and making sure the commercial terms of any engagement reflect that.

    If you don’t do this, you can be quickly disheartened by working for what you consider is a poor return. As freelancers we need to balance the needs of the Client with the commercial value we are adding and not be frightened to demand a fair price.

    Thanks
    james

  • Pingback: Negotiation for freelances | Part 2 of 2: The negotiation | ABC Copywriting blog

  • http://www.design-vibe.co.uk Adam

    I personally stick to a price and never act desperate for the work(even if you are). I prefer to be upfront with a cost which is fair for everyone, so far so good but it is the extra changes/time later on that i find difficult to control and judge.