How I take control of the budget discussion
And how you can, too
Hi Friend,
Meeting with a new potential client is a lot like going on a first date. You’re getting to know each other, you both have a mental checklist of attributes that will determine if there’s a second date, and you’re trying to see if you have rapport. Likely, there’s also some information you know should be shared. The question is, when?
When do you tell your date you have six cats, a large collection of Victorian dolls, and are obsessed with Tuvan throat singing? Do you open with it? Wait for it to come up naturally? Hope it doesn’t come up and everything will work out for the best, because they also love cats, Victorian dolls, and Tuvan throat singing. Pray that by the time it comes out they’re in love with you so the rest doesn’t matter?
Many freelancers view financial discussions the same way. They know budget is a consideration for many clients, and they know they need to make money, but they prefer to avoid the conversation. They want to hear the client say, “Go ahead, do all the work you need to do and charge me whatever price you want. Money is no object because I deeply value the work you’re doing for me.”
This almost never happens. If it does, it’s like winning the client lottery. While falling into a pit full of gold coins. As an eagle drops a sack of thousand-dollar bills on you and unicorns happily frolick nearby.
It, like a blue steak, is extremely rare.
Freelancers need to discuss finances
Discussions about money are—like politics, religion, and talking about sex with your parents—deeply uncomfortable. As a business owner, you have to have them. You have to talk about money if you want to earn it. That means you have to be willing to answer questions about fees, provide quotes for work, and follow up on late payments.
If you leave the budget conversation up to the client to bring up, then the client controls the discussion. You might get a client who’s willing to pay you more money than you would have asked for, but more often than not they’re thinking of a lower price. As soon as you’re face-to-face (or computer screen-to-computer screen), and they state a low price, you find yourself scrambling for a response that’s professional, dignified, and doesn’t put you on the hook to do a ton of work for pennies.
“Yeah, no, I think I can probably make that budget work,” is the kind of thing you’ll find yourself saying, and then immediately regretting, like when you eat that third hot dog.
So what’s the answer?
The answer is to get the conversation started before the meeting happens.
How to bring up the budget
Although I don’t have six cats, I do have a large dog. Not everyone likes dogs (which is appalling to me, and also highly suspect). Recognizing dogs might be a deal-breaker for some, I mentioned my large dog in my online dating profiles. I even included a picture of him and talked about how he needed a role model (if I’m being honest, it was a hilarious profile).
Why mention him so early?
Because he’s a non-negotiable for me and I wanted to weed out anyone who hates dogs right away. I didn’t want to get to the point of a first date or two only to find out my dog was a non-starter for them. So I made his presence and importance in my life known. People who hate dogs have the benefit of weeding me out before anyone wastes anyone’s time. We all win. (Especially my dog, because he hates people who hate him.)
Finances are often make-or-break in a client relationship. Because they’re so important, I use a similar strategy with potential that I used with potential dates, albeit somewhat reversed.* I have a questionnaire that goes out to potential clients when they book a meeting with me. In it, I ask them to explain the scope of the work and their estimated budget.
Asking about budget gives me valuable information about the potential client before we ever meet. I can see if they have a realistic budget for the project, a grossly underestimated view of the project, or no idea what their project is worth. And with this information, I can decide how best to proceed.
How I proceed
If the client’s estimated budget is in line with how they’ve described the project (or if their budget is higher than I would have charged) great! I take the meeting, make sure the parameters don’t change too much in the course of the discussion, and happily discuss fees with them.
If their budget is too low or they have no idea what the budget should be, I’m have options:
Email them to let them to let them down gently (so as not to waste anyone’s time).
Meet with them to educate them about the costs of the work they want done (in the hope that they might increase their budget or decrease their expectations).
Educate them and negotiate the scope of the work (or propose work that fits within their budget). I never negotiate on price alone. If they want to pay less, they get less.
The option I choose varies depending on how busy I am, how intriguing the work is to me, and how much I already know about the client.
Whatever I choose to do, having information about their financial commitment gives me time to set the best path forward. I can develop my script so I know exactly what I want to say, and I’m not left flustered responding in the moment to a surprisingly low budget.
Of course, this system isn’t foolproof. Sometimes I still get a surprise low figure in a meeting. But because I’m used to navigating this scenario in other conversations (educating people, negotiating on scope, proposing work that fits their budget), I’m more confident when that happens.
Asking about budget right away doesn’t make you greedy, pushy, or intrusive.
In fact, it shows you have the confidence to bring up the topic and request they give it some thought before meeting with you. If they ask why you need the budget, you can simply tell them that knowing the budget will better help you tailor the scope of the work and the estimate.
And I remind you, you’re a business person. You have the right to charge your fees. You have the right to fair compensation for the work you do and the value you provide. Someone coming in with a low budget shouldn’t undermine that.
Now, if you’re the sort of person who can hear a low number and sassily respond “Sorry, that won’t work for me,” (here I envision Linda Evangelista with her “We don’t wake up for less than $10,000 a day,”) then you might not need a strategy moving forward. (And please, teach me how to be more like you, because I would love to not wake up for less than $10,000 a day.)
For the rest of us, getting as much information as possible ahead of time, deciding on a strategy, and planning what we’ll say in advance is hugely beneficial.
If you want more tips on pricing or finances, check out these articles:
Should you ask clients about their budget? (The answer to this is somewhat contrary to my advice here, but the post linked here is based on the idea that you haven’t discussed budget before the intial meeting, so you are only thinking about finances after having met with the potential client and discussed the project, putting you in a more precarious position. I highly advise asking about budget before ever having a meeting.)
Setting prices (paid post).
Here’s to your ongoing freelance success,
Heidi
*I don’t include my rates on my website because: I don’t want to leave money on the table; the value of my work becomes more evident in conversations with me; and I charge based either on the project parameters or value, so I don’t use a cookie-cutter approach to charging clients.
I give my per page fees right up front, in my very first email. That way no one has time to get excited then disappointed... like, for instance, me!