Monday, November 12, 2007

Should You Reduce Your Rates?

It happens to all writers occasionally. Maybe you've hit the "famine" stage of the feast-or-famine lifestyle most freelancers enjoy. You're drumming your fingers, staring at your rapidly dwindling bank account and your rapidly bloating credit card bill, and you're starting to get anxious. Finally, thank the Spaghetti Monster, you get an email from a project you applied for ages ago. The client wants to hire you. You're about to do the Happy Dance around your office, when suddenly you come to the end of the email and the other shoe drops.

They're only paying half the price you usually ask.

So: should you take cut-rate jobs when the circumstances warrant it? Is it simply a matter of survival, or will it hurt you in the long run? Here are a few things to think about before you say "yes" to that cut-rate project.

How long will this take? If it's a teeny project that won't take too much of your time, that's a different matter than if it's copy for an entire website, a print-quality article with lots of interviews, or (God forbid) a long-term blogging assignment. Don't let yourself get caught up in a project that will keep you busy without adequate compensation. Those famine periods have a habit of ending as unexpectedly as they begin, and you don't want to be stuck refusing or postponing better-paying work for the slave wage project that's currently consuming your life.

Can you afford to make the cut? Think about how much money it takes for your business to stay solvent--from your electricity and rent bills to the cost of your computer. What's the minimum you have to make per day in order to stay in business? If this project doesn't pay you what you need to earn, you're probably better off using that time to market yourself.

Could you be using this time more wisely? Sometimes slow periods are a blessing in disguise. In many cases, you may get a bigger payoff in the end if you can refuse those cut-rate jobs and work for yourself instead. Start an email marketing campaign; answer some high-paying job ads; or teach yourself Dreamweaver and redesign your website. Consider this time an investment in your business. It'll pay off in the long run.

Could this actually hurt your business? Take jobs at reduced rates, and you lower your client's perception of your value. Do this too often, and you might get a reputation as the cheap guy on the block. While that will certainly bring you work, it might not be the type of work you want. If your clients care more about price than quality, they'll ditch you as soon as somebody cheaper comes along. And with writers in third-world countries selling content for a tiny fraction of the cost, somebody cheaper will eventually come along. It's an unfortunate reality of the global marketplace.

In addition, if clients successfully talk you down without granting concessions of their own, they may start to think you're price-gouging. Stick to your guns and you'll come out looking professional.

Can you negotiate? Before you give a quick yes-or-no answer to that cut-rate offer, consider negotiating. My standard response is to tell the client that I usually charge $x for such a project, and I would be able to offer the lesser price they're asking for only if some change is made that would make the project easier and the pay worth my time. These changes might include reducing the length, eliminating the need for interviews, or asking the client to provide an outline and all research materials.

When you do accept a cut-rate project, always tell the client that this is not your usual price for such work. If you really need the money, tell them that you are accepting this price as a one-time offer and that for future work of this nature, your ongoing price is $x. If you don't really need the money, say no. A few extra bucks may not be worth the time it takes to involve yourself in a cut-rate project.

Remember, you set your prices a certain way for a reason. Stick to your guns and keep your minimum mandatory earnings in mind when choosing whether or not to accept a cut-rate job. In many cases, your time may be better spent marketing your business and looking for well-paid work.

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