Hi friend,
*Note: the answer to this question seems contrary to another post about asking for a budget before the first meeting. The advice below assumes that you haven’t yet adopted that habit and so therefore are taking a meeting with the client with no knowledge of their budget. I highly recommend asking about budget before you ever meet with the client. If you don’t do so, then the advice below is for you.
If you get 10 freelancers in a room and ask them whether they think freelancers should ask clients what their budget is before giving a quote, you’ll get 100 different answers. There are as many answers to that question as there are cells in a Google Sheets document (probably, I’ve never actually counted them all).
Some freelancers swear by asking clients about their budget before they send out a quote because otherwise, you’re leaving money on the table (which isn’t the strangest place to leave money, but it’s not what you want as a business owner). Others say they’d rather eat their hat than ask about a budget. They tell freelancers to never ask about budgets because they’ll limit themselves financially if they do so.
With so many different opinions, what’s a freelancer to do?
If you’re confident in your pricing, offer project (or value) based pricing and can present different levels of scope for your work, ask clients for their budget before you write a quote.
Here’s why:
If you’re confident in your pricing and offer different packages, you won’t be tempted to simply lower your prices so you can work with this client. You’ll be able to tailor a quote based on their needs and their budget.
If their budget is short of what you would charge, you can give them a selection of packages at different price points. One option would be in their price range but wouldn’t include everything they asked for. Then you could give them two other options that are at a higher price but give them more of the services they want.
Let’s say I would charge $1,000 for a copywriting project, but the client’s budget is $500. If I offer packages, I might say that for $500, I’ll write less content and I won’t include graphics, SEO, social media content, or revisions. They still get some of the work done, but not everything and I’m not just lowering my price to work with them, I’m giving them value for their price without giving away work for free. I’ll also include a package with all the work they want done at my full price and something in between the two. It’s up to them which package they go with. (If they aren’t happy with any package, then they aren’t the clients for me.)
Additionally, if these clients are established, their budget might wind up being more than you were thinking of charging. You could increase your rates for this project (and for future clients).
Note that this is much more difficult to do if you charge by the word or by the hour, which is another point in favour of project or value-based pricing.
If you are at the start of your career, not overly confident in your pricing, not used to changing project scopes or are dealing with clients who can’t afford you (very small businesses, individuals, and start-ups), don’t ask for their budget before you send them a quote.
Here’s why:
In those circumstances, you’ll be more tempted to lower your price so you can meet their needs. You’ll never feel confident sticking with your price because you’ll get used to lowering it. You’ll start running your business based on your clients’ circumstances, not on your own.
If you’re mostly working with small businesses and start-ups that don’t have a lot of money, their budget will likely be well short of what you would charge for the project. And they may have no idea what a reasonable budget for your work would be. If they’ve never worked with a freelancer before, they have no frame of reference for your pricing. Or if they’re cheap, they’ll just give you a lower number to see if they can get a low quote from you.
They will get in your head. You’ll hear them say a number that’s about 1/3 of what you would have charged. Even if you don’t quote them that low, you’ll probably still adjust your rate down to accommodate them and increase your chances of getting the work.
Once you get used to lowering your price, it will feel comfortable. Too comfortable. You’ll be more likely to do it again and again, and then you’ll have a harder time increasing your rates.
What do I do?
I now ask clients for their budgets because I can alter the scope of a project and I’m not tempted to lower my rates just to land a client. You might not be in this position yet, and if you’re not, that’s okay. Avoid the temptation to ask for their budget if you’re likely to lower your rates to meet their expectations. Once you’re more confident and can change the scope of your projects, start asking about budgets.
Read more about my thoughts on new client discounts and setting prices (this last post is a paid post).
Here’s to your ongoing freelance success,
Heidi