Category Archives: Business Strategy

Long range, big picture, macro

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Your Big Client Bid Strategy

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Freelance consultants have to be nimble and resourceful in order to compete successfully and that is especially so when in pursuit of a big-league client.  Winning a big client is tremendous validation,  but when swimming with whales it is essential to take precautions and maintain as much control over the process as possible.   It would be disastrous to do what is second nature to many small business operators and Freelancers: whatever it takes to get the job in and whatever it takes to get the job done.   Pursuing important clients with big contracts out for bid takes a more sophisticated approach.

When assessing and pricing a big  contract,  the project fee attached to your proposal carries much weight,  in more ways than one.   Bid too high and you’re knocked out of contention.   Bid too low,  a common practice of Freelance consultants and small business owners,  and one of two impressions will be made:

1.   That you are perhaps unqualified to do the work because you’re selling your services for too little money,  or

2.   That you’re desperate for business and probably ripe for exploitation.

To both convey the image of a capable and experienced professional and ensure that you make money on the project,  be sure that you thoroughly understand what will be required to fulfill the contract and your ability to do so.   Job costing and cash flow projections will need special care.   Will you need extra expertise for some aspect of this job,  or perhaps an extra pair of hands in order to meet the timetable? 

Realize that big projects for big clients mean big accounts receivable and there can be a downside.   Be honest about how much money you can afford to have outstanding,  even if  payments are received on time.   Help yourself by requesting 20% – 35% of the project fee up-front and due within 15 days of the contract signing.   Set up a payment schedule in your proposal that ensures you’ll be able to pay any subcontractors and also yourself on time.

Freelancers and small business owners often compete on price,  but one is advised to avoid dangerously low bids in order to get work or add a marquis name to the client list,  only to receive very little profit from the project.   Michael MacMillan,  founder and CEO of MacMillan Communications of New York City,  focuses on selling personal attention and customized PR strategies to his clients and providing more bang for the buck.   “One of the advantages of being a smaller organization is that you’re more efficient because there are fewer overhead costs.  We are able to apply more of the project fee directly to account work”. 

According to Jeffrey Bolton,  managing partner at the accounting firm Daszkal Bolton LLP of Boca Raton, FL,  the key to evaluating whether to pursue a big client is to ask yourself  how important that account will be for future business growth and whether the project work fits into your strategic plan,  even if you don’t make money on it.  “If you’re trying to build a reputation,  that foot in the door is necessary,  but you must have an institutional mind-set when taking on a big client and not a mom-and-pop mind-set”.

Thanks for reading,

Kim

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How Will Your Garden Grow?

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It is often useful to look backward before one moves forward.   We may be surprised to learn that our agrarian past holds valuable lessons that can be directly transferred to today’s fast-paced,  high-tech,  high-stakes and unsentimental business environment.   In Summer 2011  I read about a farmer in Georgia named Bobby Kirk,  who made national news when he wisely pointed out that it was too hot to fish.   Summers are hot in Georgia,   so I’m sure he was right.   Bobby Kirk’s folksy observation made me think about things I’ve read that compare farming and gardening to finding clients and creating more business.   Here’s a distillation of some Farmer’s Almanac-type wisdom that I’ve picked up along the way.  I hope you find it useful.

I. Plant seeds so that you will reap a harvest.
Whatever actions you take that will grow and nurture your business venture are the seeds.  Update your assumptions regarding client motivations for hiring your type of services or customer preferences in your product category.  Update your info on competitive activity.  Attend a workshop or take a course for professional development.  Read one business book per quarter,  to sharpen your skills and get some inspiration.

II. Tend your garden.
Plants,  prospects and colleagues all have their preferred form of follow-up actions.  They all want to hear from you! Plants like sunshine,  fertilizer and water.  Prospective clients who showed more than a passing interest in your services would appreciate a call or email from you,  inviting them to lunch so that you can get to know each other better and explore how your expertise can address their business needs.  The colleague who asked you to provide a reference or answer a question would like to hear from you also,  preferably within one week.  Research shows that it takes six contacts to establish the foundation of a meaningful relationship.  Follow-up,  follow-up,  follow-up in anticipation of your harvest.
III. Last year’s crop is history.
Weather,  predators and pestilence can wipe out a garden.  Shifting business priorities,  tight budgets and competitive activity can hurt your business.  Whether you have a farm,  a consultancy or an auto repair shop,  last year’s crop is just that.  Glean available lessons from your bumper crop or plague of locusts and use that knowledge to reconfigure your strategy and work smarter next time around.
IV. The more seeds planted,  the bigger the harvest.
If you expect to grow your business you must plant more seeds,  or the harvest will be meager.   Stay focused and discover and/or create money-making opportunities.

V. Plant what you want to harvest.
If you want basil and tomatoes in August,  then plant them in May.  Who do you want to be your clients?  Learn the best way to approach them and persuade them to meet with you.  Monitor which products/services are selling and to whom.  Is there a niche market you can develop? Which categories of clients will be most profitable to your business and how can you access them or increase your access? Analyze your financials,  brainstorm options,  formulate a strategy,  plant seeds,  follow-up and reap your harvest.

Thanks for reading,
Kim

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Your Brand: Remix and Refresh

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Freelance consultants represent and inhabit our brand completely.   We are what we do and it’s to our advantage to be known for what we do because it’s good for business.  It is most advantageous to be considered a known quantity,   the obvious choice when clients are in need of our service category.   At the same time,   it is wise to take a page from the Nicki Minaj playbook  (authored by Madonna,  as you know)  and do a remix every once in a while,  to remind the marketplace that what we bring is a little ahead of the curve: au courant, relevant and therefore,  worth a premium.

So maybe every three years or so,  one may want to shuffle the cards,  or play the hand a little differently.  Before making any major changes,  however,  you are advised to obtain a clear understanding of what would be useful to tweak and what to leave alone.   To do that effectively,  it’s important to— guess what?  Talk to your clients.  If possible,  speak also with those who use your category of services but haven’t hired you.   Until you determine what you and your brand represent to clients and moreover,  get a handle on why certain folks don’t hire you,  your rebranding strategy will be counterproductive.

Media titan Kenard Gibbs,  co-founder of Madvision Media and former president of VIBE Magazine,   recommends that like Stephen Covey,  author of  “The Seven Habits of Highly Effective People” (1989),   you begin with the end in mind.   “You need to have some idea as to what you are ultimately trying to achieve …..The end goal dictates how you proceed…..”

Gibbs advises that a SWOT  (Strengths,  Weaknesses,  Opportunities,  Threats)  analysis be done once the customer,  industry and other marketplace research have been performed.   The SWOT internal  (Strengths & Weaknesses,  e.g.  strategic relationships and expertise)  and external (Opportunities & Threats,  e.g. market trends,  the economy,  client needs)  analysis guide your rebranding strategy and identify new possibilities that expand the reach of your potential client base.   SWOT will also ensure that you maintain services that clients value and that your self-editing is perceived as both logical and authentic for you. 

Timing is also of the essence,  so be smart about the rebrand roll-out.  Set a realistic timetable.    Create a timetable for the entire process,   from the client and market research and SWOT analysis to rebranding conceptualization,   strategy formulation,   implementation and assessment phases.

Finally,   give consideration to how and when you will announce to clients and colleagues that you’ve refreshed your brand and what that means.   Gibbs says  “You need to develop an integrated media plan to show that you are available to clients in new and even more useful ways,  that there is a new way to interact with your brand.”   Social media and website updates are de rigueur,   but press releases and paid advertisements in selected media outlets are not to be ignored.

Thanks for reading,

Kim

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Niche Market Opps for Freelancers

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Developing new markets is essential for all Freelance consultants and business owners.  That means it’s necessary to be aware of major trends and even significant fads,  for there is money to be made over the long or short-term.   How does one learn about the existence of niche markets that may be promising for you?  Stay abreast of current events by reading good newspapers,  business articles,  blogs and magazines.   Talk to your friends,  family and colleagues.   Do volunteer work,   go to the gym,  out for a bike ride,  or drinking with your pals.   In other words,  be fully engaged in life and the information that you seek will either come to you or will be unearthed by you.   If you read the March 20 post on making your own luck,   you’ll know what to do.

Career Transition consultants

How to identify a second career and segue from one’s current line of work and  into what will be more personally and/or financially rewarding is on the must-do list of many professionals,  employed and unemployed.   Some folks are preparing for a possible lay-off,  some for retirement and still others want to make a career change while they’re still young enough to enjoy it.   Discovering the industry and job specs of work that resonates with you and formulating an effective career change recipe that leverages skills,   relationships and whatever additional training that will open the right doors drives the business of career transition coaches.   Also, companies that are in the midst of a major staff reduction often hire career transition consultants to soften the landing of employees who’ve been let go.

Generation Y Marketing consultants

Many businesses and large cultural institutions,   notably ballet,  opera and regional theater companies,   symphonies and museums,  are determined to add under 35 members to their aging family of donors and subscribers.   Generation Y is integral to an organization’s survival and to that end marketing and development departments have been offering discount subscriptions,   innovative social events designed with younger audiences in mind and other targeted marketing initiatives that might attact the Gen Y crowd.   Institutions cannot afford to slack off on these campaigns and consultants who specialize in marketing to the under 35 cohort are being hired to keep the audience-building strategies flowing.

Home Security consultants

Listen to your local television news report tonight and you’re guaranteed to be inundated with the horrific details of lurid crimes committed in both middle class and low-income neighborhoods.  Home invasions,  car jackings,  bullying,  identity theft and shoot-outs in Wal-Mart parking lots occur with shocking regularity these days.   As a result,  fear for one’s personal safety is on the rise and home security consultants have seen a significant uptick in billable hours as many individuals seek to protect their physical and online security.   Police officers and detectives are qualified to give advice on how to secure doors and windows and where to improve lighting,   as well as give useful advice regarding mail and newspaper deliveries when one will be out-of-town and pointing out the perils of announcing your vacation plans on your Facebook page  (why tip-off thieves?).   Electricians are qualified to install sophisticated home alarm systems and IT specialists will set up protocols for your computer.

Home Organizing consultants

When you decide it’s finally time to get your office,  closets,  basement and whatever else organized so that you can live and work at peak efficiency,   home organizing consultants will come to your rescue and help you purge the clutter and effectively organize,   store abnd label what you will keep.  The best will have training in Feng Shui.   Additionally,   most also give pointers on useful organizing accessories,  office furniture and other tips to make your home environment pleasant and conducive to attracting good energy.

Image consultants

We all want to look our best,   but many of us can use some pointers.   There is a critical mass of shoppers  (and not just the very affluent)  who are willing to pay a professional shopper or stylist to help them identify flattering styles and colors and devise a mode of attire that reflects their personality and fits with their professional and social lives.    Since the early 1990s,   high-end department stores have offered personal shoppers to work with customers and increase sales and loyalty to the store.   The notoriety of Hollywood stylists who dress the stars for award shows and other high-profile personal appearances has caused that service to trickle down to the middle class masses.

Thanks for reading,

Kim

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Top Niche Markets for Freelancers

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Every business is in search of promising niche markets that will bring additional dollars to the bottom line.   Some Freelance consultants successfully operate totally within a narrow yet lucrative niche,   but most of us choose to expand our focus to include a particular niche market.   Depending on your specialty,   it could make sense for you to weigh the possibility of entering one of these growing markets.   To position yourself  for successful entry,   it might be necessary to get some training and perhaps a certification.   No doubt you’ll also need to establish a couple of key new relationships to help you get a foot in the door.   But if your research and your gut tell you that there’s reason to believe you have a shot of picking up a client or two,  then by all means get the ball rolling and do what you have to do.

 Environmental sustainability consultants

Opportunities to incorporate environmentally smart and friendly measures into homes and offices continue to grow.   The sustainability / green movement has a tremendous amount of feel-good attached,  as people strive to become better stewards of our environment.   Businesses and individuals are jumping onto the green bandwagon.   Tax incentives to persuade businesses to go green  are in place.   At home,   investments in energy efficiency translate into lower utility bills.   If you have the qualifications to hang out a shingle and address eco-friendly sustainability,   clean-tech or other green business issues,   then green will also mean dollars earned.  MBAs with a sub-specialty in sustainability,  architects,  engineers,  urban planners,   building contractors and electricians are who I see reaping the benefits. 

Home office design consultants

If you were born with an eye for arranging furniture,  understand and can communicate the benefits of ergonomic furniture and are up-to-date on bleeding edge IT products and can help people sort out their business technology needs,  then becoming a home office consultant may be the niche for you.   Knowledge of Feng Shui is another big plus.   Many more people work from home either entirely or occasionally as compared to the 1990s and the ranks of the self-employed and telecommuters continue to grow.   Even the federal government is promoting telecommuting and funding requirements to support the process have been established.   Presumably,   government contracts to hire home office design consultants for federal employees who are able to telecommute are available.

Gardening consultants

Americans are spending more time at home and as a result citizens are investing more money there,   indoors and out.   Those with green thumb or brown are hiring consultants to show them gardening possibilities and present a menu of suitable plants that will help them identify and express their preferred gardening styles.  The consultants will also interface with landscapers to design the customized outdoor space.   Gardening consultants style window boxes for city folk and Christmas greenery in town and country,  too.  There are even vegetable garden consultants.

 Color consultants

A required course for my undergraduate degree in Psychology was called   “Physiological Bases of Behavior”  and in that course we examined the psychological perception of color.   Hospitals have for decades used certain colors in surgical suites and recovery rooms to promote a calming vibe for patients and surgeons.  Scientific research over the decades since I graduated from college has further defined the power of color to influence buying habits and stimulate appetite,  which has made big-budget retail establishments and restaurant chains important clients for the color specialists.

I’ll have more niche markets for you to ponder next week.  Thanks for reading,

Kim

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Be a First Class Freelancer

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What do clients want when they look to hire a Freelance contractor?  On a conscious level they know that a job must be done and that the time and/or expertise to do the job does not reside within the organization and so outside help must be brought in.  They know certain deliverables must be produced within a particular time frame and they know what can be spent to achieve their objectives.  But what makes a client hire one Freelancer over others who may be interviewed?  What is the secret sauce that can make you be The One?

Be creative,  perceptive and adaptable

During the first meeting,  First Class Freelancers can quickly and accurately assess client needs.  Failing that,  s/he will know the right questions to ask that draw out and clarify objectives and priorities.  The First Class Freelancer will know whether and how their own skill set will match with client needs and will be able to articulate that assessment in language that is readily understood.   As a result,  trust and confidence in your abilities are quickly established and the foundation for rapport-building and a productive working relationship is set.

An experienced pro

If you nail Step One,  the client will know that you have the goods to meet and very likely exceed expectations and that there is no doubt that you will get the job done and make him/her look good to both superiors and subordinates.  First Class Freelancers let it be known through their grasp of the client’s big picture needs that the ROI of bringing them in will be substantial.  Deadlines will be met and work will be of the highest quality.  This allows the first class crew to command  premium prices and the client doesn’t quibble,  because his/her reputation is about to be enhanced.  If necessary,  s/he’ll go to bat for you and get more money appropriated for the project to cover your fee.

Operate like a business

Be highly professional in client interactions and all forms of business communication.  Follow-up promptly,  invoice at the appropriate times and write good proposals  (that are really confirmations,  because you’ve impressed the decision-maker and pretty much know you’ll win the contract).  Present yourself as an equal and a peer,  but respect boundaries and remember that you have a green card but you’re not a citizen.  Radiate confidence and success  (but never smugness or arrogance).  Create the impression that although times are tough,  you have a viable client roster because you have credibility and competence.

After you’ve been out on your own for a while and identified the types of projects that you like and the types of clients that tend to hire you,  carve out a specialty niche where you can excel.  Resist the temptation to take any and every project that comes your way  (unless the cupboard is bare).  Develop the corresponding verbal packaging that will be your business introduction and elevator pitch,  as well as online and print collaterals that effectively represent and communicate your brand.

Smart negotiator

It’s during contract negotiation that your prospective client will know what you think your time and talent are worth,  how experienced you really are and the prestige level of the projects you’ve previously worked on.  If you accept the first offer that’s given and consequently sign for noticeably less than expected,  they’ll know you’re wet behind the ears or you’ve only done low-budget projects.  They’ll know you’re not in the big-time.  This information will also be telegraphed if you fail to discuss payment terms during contract negotiations and ask for some percentage of up-front money before you start work.

Get busy and write yourself a fist class ticket so you can get paid to travel in style!

Thanks for reading,

Kim

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Sales and Networking Resolutions for 2012

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Welcome back for the final installment of New Year’s resolutions.  To keep yourself motivated to do what you resolve to do,  be aware that the key to success with any resolution,  personal or business,  is willpower.  Once you’ve set your goal,  then it’s all about execution.  Willpower—call it commitment or perseverance if you like— is the x-factor that most often separates winners from losers  (although good luck helps, too!).

Invite success by instituting systems that will keep you on your path.  Always develop strategies and an action plan for each resolution/goal.  Write up your resolutions and action plan timetable and tape it to your office wall.  Enter action plan activities and tasks into your calendar.  Attach notes to your file cabinet or refrigerator.  Reward yourself when key milestones are reached.

Resolve to network with purpose

A colleague named Lisa is very proud of her networking schedule.  She brags about attending five or six events every week.  The girl is everywhere.  A colleague named Erika is out and about less often.  She attends an event about once a month and works on getting to know the right people and building relationships over time.

So which Freelance consultant has the better reputation and bigger billable hours?  Erika does,  by far.  She works with name brand clients and she always seems to have a job in  (or has just completed or is about to start).  The last time Lisa and I spoke,  she told me that she hadn’t had a client in about six months.   So what’s up? Apparently,  Erika has figured out a networking strategy and activities that bring opportunities.  Lisa’s  “networking strategy”  seems to leave her with nothing but a bar tab and a tax write-off for event admission charges.

It’s interesting,  because it was Lisa who schooled me on the importance of having a networking agenda:

  • Get a client
  • Get a referral
  • Get information

Unfortunately,  the girl does not follow her own advice well enough.  While it’s advantageous to have a presence among peers and potential clients and also check out a fresh venue now and again,  it’s more important to know who will be in the room and understand why you should spend time and money to be there.

Swanning around town is not a viable networking strategy.  The process obviously is random and we never know when and where our next good client will appear—maybe in Pilates class?—but you still need to institute a system and go fishing where the fish you can catch will be.  Review your networking strategy and its ROI.   How did it contribute to your sales pipeline and what was your conversion rate?  Which events might you add or delete?

Take time also to refine the verbal package that is your elevator pitch.  Are you communicating the right info about your talents and services that grabs the attention and respect of potential clients? Do you know what their hot-button issues will be in 2012?

Resolve to show more than tell

Clients want relevant information about your services and how they will drive objectives.  They need to be assured that bringing you in on a project will make them look smart to both subordinates and superiors.

Rather than just droning on about how wonderful you are,  show prospective clients what you can do for them.  Set up this process by doing some research on the organization and its mission and customers.  Get a working knowledge of how your expertise will be useful.

If possible,  tell a story of a similar project you’ve successfully worked on,  to paint a picture that helps the client visualize how what you do fits with their needs.  With that approach,  you may even be positioned to up-sell services they didn’t know they wanted.  Present yourself as a trusted resource who is there to promote the client’s interests.

Good luck with your resolutions and thanks for reading,

Kim

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Business Planning Resolutions for 2012

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This week we’ll consider where you’d like to take your business,  what you’d like it to look like and how you’d like it to operate.  Every journey has a destination or goal.  The journey of your business should not be random;  it deserves careful thought and planning.  Reserve some quiet time to think about the journey of your Freelance venture.  You may want to start by reviewing where you’ve been.

Which kinds of clients and assignments give you the most fulfillment?  Which let your talents shine and/or bring in the most money? What competencies have you learned along the way?  What has taught you to become wiser and more confident?  What were your successes and what would you like to do better next time,  or maybe avoid altogether? Take stock and make a plan for the New Year.

Resolve to develop business goals and strategies

This sounds obvious,  but we all know that it’s very easy to get totally caught up in just trying to find clients and get paid,  getting tunnel vision.  We become like the hamster in a wheel,  busy–busy running in circles,  without giving adequate thought to our actions and following a road map.  As a result,  we can be going nowhere fast.

Start this year by nurturing yourself and taking time to reflect on what has transpired over the past year or two and acknowledging how you feel about it.  Did you set goals for your business? Were they realistic for you?  Which goals did you achieve and how did that occur?  Re-evaluate the direction it makes sense for your business to take and brainstorm strategies that you can enact  (alone or with the help of colleagues)  to bring it there.

Planning is the only way to create a successful business venture.  Set your direction and develop SMART goals :  Specific, Measurable,  Attainable,  Realistic and Time-bound.  Next devise strategies,  the path you will take to reach the goal.  Follow through with action plans  (with dates attached),  to keep you moving forward and on schedule.  Revisit your goals in three months and assess what is working,  what needs tweaking and what should be jettisoned.

Resolve to reaffirm your business model

The business model is the framework by which the business functions as a business:  the products and services that are offered;  by what methods,  in what location and by whom products and services are delivered to customers;  how the business will attract and retain customers;  the length of the sales cycle;  and how and when payment for products and services will be made.  Is your business model operating effectively?  In 2012,  take steps to ensure that your operation functions like a well-oiled machine.

For Freelance consultants,  the system of outreach to potential clients is often a sticking point.   Periodic review should be given to the products and services offered and how they are packaged,  presented, delivered and priced.  Talking with trusted clients is a good way to get feedback on your business model.  If you’re a LinkedIn member,  visit the Answers Forum and put questions out to your peers.  You will likely receive much useful information.

Finally,  review how you typically obtain clients and prospects.  Do you solicit them  (and how that happens),  do they find you  (and how that happens),  or do colleagues make referrals and introduction?  Which method has the best conversion rate?   What is the profile of organizations that have become your best clients over the past three years? Use what you learn about all of the above to buff up your business model and set the stage for a more profitable 2012.  New Year’s Resolutions will conclude next week.

Thanks for reading,

Kim

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Protect Your Intellectual Property

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Suppose you decide to do what I recently did and contact the managing partner of a consulting firm and propose that the two entities agree to explore the possibility of  forming a business alliance that just might become very profitable? Business is all about deal-making and every once in a while a Freelancer has to pitch a good proposal to the right prospect.  After all,  nothing ventured,  nothing gained.

But there is risk involved,  usually for the smaller entity.  Freelancers typically offer intangible services,  better known as intellectual property.  We trade on our expertise and judgment,  our brand and reputation,  that which distinguishes us from the pack and allows us to make a  living.

Engaging in a business alliance or joint venture usually involves the sharing of intellectual property by one or both of the parties  (in this case,  it would be me).  How can you protect yourself from unscrupulous operators who might decide to appropriate your valuable IP,  when you’re out there trying to be proactive and proposing potential business deals to parties that might be interested,  without getting ripped off  for the fruits of your ingenuity?

Denver attorney Susan F. Fisher defines intellectual property or trade secrets as  “any formula,  method,  or information that gives you a competitive advantage…anything that takes time,  money or effort to develop and that you don’t want potential competitors to know about.”  Most business alliances,  including licensing arrangements,  require a Freelancer or business owner to reveal trade secrets and other IP.

Protecting the coin of your realm is a top priority.  Surprisingly,  that can mostly be achieved by taking just a few simple steps that cost no money at all.  Step one is to identify your intellectual property or trade secrets as restricted material and therefore not available for general distribution.  Mark the material “Confidential” in big bold typescript.  Step two is to require a special password to access the document file,  to provide yet another level of security.

A third IP security measure is to unambiguously state in a letter,  or in the email to which the file of IP information is attached,  that said information is proprietary and confidential and that it is being provided as part of a business proposition in which you would like to be paid,  should the proposal come to fruition.

Instituting such safeguards not only protects IP,  but also demonstrates to lawyers,  judges and juries that you identified your IP as confidential and not for general distribution,  that you made it known that the information you shared was sensitive and that you intended and attempted to protect your IP,  should a dispute ever lead to litigation.

The ultimate level of security is to require that the party with whom you share IP sign a nondisclosure agreement.  The NDA provides formal legal protection of  your IP and trade secrets.  Furthermore,   the NDA specifies what information is considered proprietary and what is not and will also describe limits as to how the IP may be used and for how long the information must remain confidential.  In the NDA,  your attorney should request that all copies of confidential information that detail the ingredients of your  “secret sauce”  be returned to you at the end of that term.

So by all means,  be an enterprising Freelancer and pitch a good idea to the right decision-maker.  Just be sure to start the venture off on the right foot by taking a couple of no-cost steps to protect your interests.  I’ll let you know how things turn out with my idea.   I was invited to call the managing partner in early December to find out if he and his colleagues feel that we have something to discuss.

Thanks for reading,

Kim

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Raise Prices? In This Economy?

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An effective pricing strategy is essential to every business,  because one goes into business to make money.  Freelancers and business owners deserve to be paid just as every worker expects payment for services or labor performed.  Determining how to price products is fairly straightforward  (what is the cost of materials? what is the price of labor?),  but pricing services,  especially intangibles,  can be daunting.  Many Freelancers operate in the knowledge economy  (e.g., providing leadership training)  and it’s not always possible to benchmark your prices against that of competitors’.

Add to the mix that clients are well aware that they have the upper hand in nearly all fee negotiations.  Exploitation is alive and well and there can be shameless manipulation to obtain your top-drawer services at bargain-basement prices.  The smug assumption is that if you refuse to work dirt cheap,  then it will be easy enough to find someone else who will.

Then there are the  “clients”  who request free services in exchange for  “opportunities for exposure”  or  “future paid work”  that I strongly suspect never materializes.  (Why would it?  Once you’ve built their website for free,  they no longer need you.)   In my experience,  nonprofits are the worse offenders and they do it with a clear conscience.  They rationalize their disrespectful behavior because their budgets are thinly stretched and their organization is all about doing good.  Ha!

Yes,  there is risk to raising prices in this climate of hyper cost-consciousness,  but every once in a while one must raise prices and there may be compelling reasons to do so now.  Your price increase may be in response to any number of factors,  not the least of which is to synchronize the value you bring with the fees you charge.  Or maybe you just plain old need more money to maintain your preferred standard of living as you hand over more money than you should for groceries and gasoline.

The art of pricing is to charge a fee that simultaneously reflects your perceived value to clients and allows you to achieve your desired bottom line.  To that end,  you can discover useful competitive intelligence at http://gsa.gov/mobis and learn what others in your specialty charge the US government for consulting services rendered.

To access,  see the search box at top right and enter a professional category  (e.g. project management).  Scroll through the businesses listed until you find one based in your geography.  Look to the right,  click  “terms and conditions”  and view the services and prices revealed.

If you learn that your prices are rather low by comparison,  then it might be time for a price increase.  Additionally,  if clients remark that your services are a wonderful bargain,  then it’s definitely time to give yourself a raise.

Be aware that billing practices can either help or hinder the introduction and acceptance of a price increase.  It’s easier to bill by the hour and for small jobs that may suffice.  But hourly billing can expose you to haggling over your hourly rate,  making a price increase unpalatable for those who’ve worked with you before.

A flat project fee holds many advantages and typically benefits both Freelancer and client.  A project fee also makes it easier to institute your price increase.  To make sure that you don’t lose money on a job,  obtain written project specifications  (to avoid  “mission creep”)  and calculate the number of hours/week it should take to successfully complete the job.

Be sure to add in at least 2 – 3 hours extra per week to accommodate unexpected delays.  You may even choose to discount your  (discreetly increased)  fee somewhat,  in exchange for the stability of working on a long-term project  (because those extra hours allotted may not all be used).  Furthermore,  you should also specify a weekly cap for hours worked and set an hourly rate for time worked in excess of the cap.

Your mission,  should you decide to accept,  is to get paid what you’re worth.  Investigate MOBIS to learn how your prices compare to competitors’.  Whatever your pricing,  if you feel that an increase is in order,  be strategic about your approach.

Billing a flat project fee whenever possible is likely to be helpful to you and your clients  (they’ll know the project cost up front).  A modest price increase may be best,  or perhaps increase only the prices of selected services.  Most of all,  as discussed in previous posts,  you must work with the right clients and sell the value of your services.

Thanks for reading,

Kim