If one of your goals for the new year is earning more money, you’ve got two options: work more or get paid more for the work you do. I like the second option, personally, but I know it scares a lot of people because it means they’ll have to negotiate over MONEY.
Negotiating over money shouldn’t be an endless back and forth where each side throws out random numbers until they’re so sick of negotiating they start thinking bad things about the other person’s mother. If all you’re focusing on when you negotiate over money are the numbers, you’re doing it wrong.
To get the best results in money negotiations, here is the secret: don’t focus on the numbers.
Sounds quippy, but how do you do that, exactly?
Money isn’t valuable.
On its own, out of context, money isn’t valuable. Money is valuable because of what it allows us to do, because of the value we prescribe to it. And while $20 in my hand and $20 in your hand can buy us the exact same things, the value of that $20 for each of us will be slightly different, because what we each need is different.
When you focus on the numbers in negotiations over money, you ignore the value of the money. And when you ignore the value of what you’re negotiating over, it’s difficult to determine if what you’re getting is what you need.
So what should you do?
Figure out what the money in the deal represents for you.
A simple way of doing this is to ask yourself, “Why?” Why do you want this amount of money?
Ask that question several times and really challenge yourself to come up with a variety of answers. Wanting the money because it will help you pay rent and because you’ll be able to buy groceries are the same answer: you want this amount of money because it helps you pay for your day-to-day needs. That’s a great reason, but it’s only one reason.
If you want to be able to negotiate effectively over money, you need to understand why the money in this negotiation is important to you. So dig deep into your reasoning; it will help you out in the long run.
She works hard for the money
Context is also important when we’re talking about money. Two jobs that offer the same amount of money may very well offer different values of money because of who the jobs are for, what the work is, or the amount of time you have to complete the job.
Let’s say a client wants you to provide A, B, C, and D for $1,000 with everything done and delivered in three weeks. You know from experience that you can get A, B, C, and D done in three weeks if the planets align and the client is speedy with her feedback, but it will be a stressful and demanding three weeks. And while you’ve done that amount of work for that price in the past, considering the time, work, and personalities involved this time around, $1,000 won’t cut it for you. Your client is firm on the price; you told her $1,500 is the cost for the work and timeline she has, but she told you $1,000 is all she has in her budget and asked you to “work your magic.”
Since she won’t move on money, negotiate the other elements of the job–timeline, deliverables, client responsibilities–so the value of the money better represents the value of your work. Don’t feel like you have to give the client highly valuable work for a less than suitable price because of her budget. If she doesn’t have the budget for the work she needs, or thinks she needs, that’s not your fault.
“Frances, I understand your budget is tight, but it’s not sufficient for all the work you’ve listed by the deadline you’ve set. So I have two options: I can give you A, B, and C in three weeks for $1,000 if you can promise 24 hour turnaround on feedback. Or, if your team can produce 50% of A and certain elements of B & C, I can do all four deliverables for $1,000. I wouldn’t be able to commit to a deadline until I’ve seen your team’s work, though.”
Focusing on the value of money in a negotiation, rather than the amount, will make it easier for you to handle the negotiation. You’ll be better able to determine if an offer is good, and if it’s not, you’ll know what other aspects of the negotiation need to be tweaked for that number to match the value you’re being asked to provide.
I’m curious, how do you approach money negotiations with clients like Frances? Share your advice in the comments below.
Categories: Negotiation Strategy
Tags: $Money$, Freelance, Negotiation, practical advice, strategy
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