How To Charge More and Not Be Afraid Of Losing Work to Your Client Employees

You are often afraid that you can lose your contract work to an employee or to an in-house team of your client.

Each time you are entering negotiations with a potential client, you trying to provide an offer which will cost them less than their employees.

As a result your rate is often less than what an employee makes in the same amount of time, but hey you’ve got much more freedom and other benefits, right?

Well, you might have, but they don’t make up for all the money that you are leaving on the table.

And if that is not enough there are many more other things to worry about because you are actually running a business, your own business.

Wouldn’t it be nice if you could - understand how your clients thinks? - negotiate with confidence a higher rate than any employee? - don’t have to compare yourself to your client employees at all? - have less things to worry about?

There is not just one but many reasons why you should be confident that you will not lose work because of a client employees.

Your client doesn’t look for someone full time

It is hard to hire an employee just for a few months and then let them go. In many places it is actually impossible, due to local laws.

Even when it is legal, no one wants to be hired just for a few months and then let go. Unless of course they are a consultant or a freelancer.

It is even harder when your client work requires someone for just 20 hours a week. They can give the work on some existing employee because this is half of their time and they cannot hire someone new for just half the time.

On the other hand, using freelancers and consultants provide your clients with all the flexibility they need.

They can hire you just for the project and just for the amount of time the project actually requires.

Of course, this flexibility has a price for them and one more reason why your rate should be higher.

Finding capable employees is hard

Have you heard how hard is to hire someone capable? Especially developers, designers and other IT professionals?

The demand is enormous, growing and much bigger than the supply. Everyone is going digital.

This make you very valuable, and valuable things don’t come cheap. Your rate should be higher.

Often it is easier to higher freelancers or consultants to work on a project, then find a new employee.

The alternative for the company is to use an existing employee, but usually those have already way too much other work.

They want a solution right now

The biggest advantage of a freelancer or a consultant is that you provide immediately knowledge, experience and a solution.

This is really the biggest reason why clients hire you.

Employees require training and time for adaptation. Often this can take months before they can show their full potential.

On the other hand, you can provide immediately a win for them by solving your client’s problems.

This immediate win is extremely valuable, which should command a high price for your services.

You should charge more

I am not going to stop repeating at the end of section. You should increase your rates.

You just read many reasons why you are so valuable to any client out there. Valuable comes from value. The more value there is the higher the price should be.

Your price. Your rate. Charge More.

You provide more benefits, therefore you should be paid better. It is as simple as that.

Your rate might be double, tripe or even 20 times more. Yes, there are freelancers and consultants who earn 20 times more than regular employees for the same amount of time.

Don’t decide rates based on an employee salary

Those people earn that much more because they decide their rates not based on employees salaries but based on the value and the outcome they provide to their clients.

If your 20 hour work for your client will make them $100,000 in the long run you can get $10,000 for your work, effectively making $500 an hour.

It is all about what value and outcome your clients will get out of your work. You might think that this is difficult to know. Sometimes it is, sometimes it is not, and you will not always get it right.

Actually, there is no right or wrong here, it is just to earn more. With experience you will learn how to estimate the outcomes for your client, so that you can provide a faire and higher price for your services.

Your rates are higher, but you are still a better deal

Even when your rate is 20 times higher, you are actually cheaper than an employee. It is just math, math which we often ignore or forget to do.

First, the employee salary is not the only cost to your clients. There is healthcare, taxes and many other costs.

These costs are always significant and depending on local laws they can be very large, as much as the employee salary and on occasion even more.

Second, as I already told you an employee usually works for the company for much longer time than freelancers and consultants. They are hired for at leas a year and often more.

What’s more they cannot be just discarded, as serious compensations are required by law.

As a result the total amount spent on an employee is much higher, even when your rate is 10 times to what the employees of the client make in the same amount of time.

Not all clients are equal

However, even when you are confident and you can ask for a high rate, it doesn’t mean that you will get every contract work out there.

Sometimes potential clients need to accomplish some work which doesn’t really require your expertise. They might just require a pair of hands to type some code.

Using your high rate service will be just throwing money for him, and accepting his low rate offer will be a loss for you when there are so many higher paid opportunities.

Sometimes however, the client really requires your special abilities, and he is also ready to pay your premium rate, but you are not just for each other.

The way you work and accomplish your task might not be the way he like to work with you. You might not like the way he works either. Often it is better in those cases to leave each other, because there are so many other opportunities for both the find the right people to work with well.

Sometimes also clients are hopeless. They just don’t appreciate you, they don’t appreciate your work.

As a result they try to convince you to provide them a cheap service and they still threat you badly. They might not even do it on purpose.

It is ok to refuse to work and fire those kind of clients.

Next

You have learned how clients think and why you are so valuable. You can go in your next negotiation with much more confidence and ask for higher rate.

Even if a potential client try to compare you to an employee you can show them the numbers that you are actually a much better value that they can receive immediately.


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