Decisions_TaxAgility Accountants LondonWe all want to be paid more for what we do, with contractors and freelancers, such as yourself, being in a better position than any of us to negotiate your way to the top.

Whether you’re a freelance photographer, electrical contractor, or the owner of a small service business, the below negotiation tactics should put you in a position to negotiate better rates in no time. Keep in mind, the higher rate you choose must be justified. It’s only fair that you’re paid a reasonable figure for each job (see point one), but it’s equally fair that your clients aren’t overpaying for the service you’re providing.

Our negotiation tactics for contractors and small service business owners are as follows:

1) Understand Your True Value

This isn’t some airy-fairy point, but rather a clear issue surrounding you being paid what you’re worth based on a number of factors including your ability, experience, and how much your client gets out of the work you’re doing for them.

Your true value isn’t (unfortunately) based off what you believe you’re worth — you can’t increase your rates by a factor of ten overnight and expect your clients to happily go along with it — but you are recommended to negotiate from a high figure for each project, with the expectation that further counter-offers will bring the price down to a lower, fairer figure.

2) Charge Per Project

This is an area that will require steep negotiation, and may, in the beginning, result in you losing some potential clients.

Though charging by the hour works for some people; doing so isn’t a true representation of their value (see above). If you charge by the hour throughout your career, whether you’re a writer or a plumber, you actually lose money over time, as you become more efficient and jobs take a shorter amount of time. Does that sound fair to you?

Charging by the project, on every project, will teach your clients that your expertise is worth paying for, regardless of how long it takes you to administer it.

3) Stay Alert to Market Changes

The needs of a market can change overnight, with supply and demand having an enormous effect on how much the work you provide is worth at market level.

For this reason, you must stay alert to market changes at all times. This isn’t to say you should instantly start charging a longtime client more one week as demand in your industry rises, but it does mean you should consider such a change should demand continue to rise over the longer term.

4) Walk Away

Our final negotiation tactic is to always give yourself the option to walk away, and make sure your clients and potential clients know this.  If your negotiation reaches a point where you cannot agree and face a stalemate, rather than resorting to rock, paper, scissors to resolve the conflict, you need to be prepared to bow out gracefully.

This point goes hand in hand with knowing your true value. Have a low figure in your head as the absolute lowest amount you’ll be willing to be paid for a particular project. If a client can’t get to this figure, you should walk away.

Working for a client who doesn’t value your work is always much more hassle than it’s worth; and there’s always a chance they’ll respect your decision and contact you the next time they have a project with a larger budget.

We Can Help Contractors Negotiate Better Rates

To speak with a professional to discuss anything related to your business financials, such as taxation, expenses, self assessment, or how to maximise your take-home pay by being able to negotiate better rates, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.


This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.