How to negotiate rates in a time of unprecedented contractor competition
It sounds trite to say that the last few months have been tough for the self-employed, but they have been. COVID-19 has ravaged the working landscape for contractors and as we emerge into a post-lockdown society, it’s clear that for many, things have changed beyond recognition.
Listening to our customers, we’ve heard how opportunities are thinner on the ground, how more and more contractors are bidding for fewer jobs, and how this is resulting in fierce competition – particularly regarding rates.
And here lies a conundrum for many: how do you negotiate reasonable rates that are competitive and attractive to a client without devaluing your work, all while ensuring you have enough to live on? You’ll be relieved to know it’s not about being the cheapest option, but rather everything to do with showing that you give value for money.
We’ve put together some tips on how to do just that.
It’s all in the proposal
Your proposal is the first chance you get to show your potential client how you can benefit them, so make sure it’s in-depth. Yes, this means putting in a fair bit of time and effort on something you’re not getting paid for – but it will pay dividends. Make sure you cover all of the points in the brief and clearly show where you can add value.
Remember to think outside the box as well. Is there something you think they’ve missed? Put it in there as a suggestion. If you can, illustrate with examples from your own experience.
In short, show them exactly why you’re worth it. Wow them.
Spruce up the portfolio
Every contractor is guilty of letting their portfolio slide at one time or another. While work is still a bit slow, now is the ideal time to get it up to date.
Make sure your most recent projects and the projects you are most proud of are front and centre. If you have different skillsets or specialisms then perhaps consider having more than one portfolio to clearly demonstrate each of them. Remember, your portfolio backs up your proposal – it shows you can do all of the things you’re suggesting you do so make sure it’s fresh and relevant.
Invest in personal projects
If you’ve acquired some new skills in lockdown, or have skills you don’t often get to use during the course of your normal work, you want a way to show them off in your portfolio. This is where personal projects come in.
If, for instance, you’ve learned how to develop apps, develop one you can show off to potential clients. This might be something you develop for yourself, just for fun, or you might want to develop one in your spare time to help out a friend’s business or charity. Either way, it’s something you can use as a calling card to show off this new skill, even though you may not have completed it in a professional capacity.
In the UK, we’re not very good at selling ourselves. What others call marketing, we call bragging and we think it’s rude. Well, one of the worst things you can do is let a client think you’re somehow embarrassed by how much you charge for your services. Instead of skirting around the issue, or being apologetic, be frank and open with potential clients about your rates and why you’re not the cheapest out there.
Remember: you’re experienced, you’re professional, you’re competent. You’ll do the work properly and you’ll get it right first time. While other contractors may be cheaper, they are unlikely to have your level of seniority and experience – if they did, their rates wouldn’t be so low.
Let your client know that they get what they pay for and that you really can deliver the goods (but avoid slating other members of your profession – word gets around and we’re all in this together!).
Show you’re a safe bet
Cheaper contractors will often only have the bare minimum insurance which, in many cases, wouldn’t be enough if they found themselves in deep water. You can demonstrate that you’re not a risk to clients by showing that you have a full suite of business insurance and that you’re covered for every eventuality.
Businesses don’t like risk at the best of times, but in the current climate it’s positively repellent. So, if your potential client can see you’re fully insured should anything go wrong, it will help them see that you’re a safe bet, even if your rates are a bit higher than the competition.
As coronavirus measures ease and lockdown comes to an end, opportunities will begin to spring up, but you needn’t fear the increased competition. Believe in your worth, don’t sell yourself short and you’ll turn potential clients into current clients. In the meantime, we can’t help with your portfolio, but we can help you with contractor insurance.