Business Challenge: 5 Easy, Low-Stress Steps to Hone Your Negotiation Skills
Ah, negotiation. Does the thought of it make you just want to dive into your bed and hide underneath the sheets?
Probably so, if you’re an introvert like me. The problem is, this attitude brings with it a huge opportunity cost.
Let’s look at a couple of eye-popping statistics:
- In 2019, a global staffing firm reported that when hiring new staff, 70% of managers expect for the candidate to try to negotiate a better offer. But, only about half of candidates actually do.
- According to ZipRecruiter’s calculations, an employee who negotiates a fairly modest starting salary boost (say, from $40,000 to $45,000) over a 45-year career would earn up to $750,000 more over the course of their lifetime, compared to a person who did not negotiate the higher starting salary.
- And for freelancers, being brave about money conversations is no less important. In fact, it’s even more so, considering they have only so many billable hours. (A 2018 survey indicated that only 8% of freelancers have 31-40 billable hours per week.) With fewer billable hours, you’ve got to make every hour count.
For sure, getting good at negotiation takes time and a little bit of courage. But, practicing negotiation doesn’t have to be stressful.
That’s why this month, we’re going to focus on honing our negotiation skills. This way, the next time we get into a money conversation, we’ll be equipped to land the best fees possible.
Step 1: Quiz Yourself
The first step in this month’s challenge is to take stock of your past negotiating successes and failures. To do this, we’ll take a quick quiz.
On a piece of paper or in a Google Doc, create four different columns to categorize the most memorable moments in your negotiating history. Here’s how you can organize them:
- Column 1: Your Successes. Write down the instances you’re proud of – those times when you successfully negotiated a higher salary or managed to raise your fees with an existing client.
- Column 2: Good Tries. Record any occasion when you tried to negotiate a better offer but didn’t end up succeeding. You asked for more, but it didn’t work out.
- Column 3: Missed Opportunities. Next, write down any moments when you didn’t try to negotiate a better offer, although you could have. For instance, maybe you took a project you knew paid too little, or maybe you stayed with a client for too long without raising your fees.
- Column 4: The No’s. Finally, write down any moments when you turned down an offer, without bothering to negotiate. Maybe someone wanted you to volunteer your time, or a client asked you to do a job for a crazy-low fee. Put all these situations in the “no” column.
Once you have your four columns filled out, take a look at which one is the longest.
If your first is the longest (or at least, longer than all but the fourth column), congrats! You’re clearly doing something right. Your negotiation strategies are probably working well for you.
If your second column is the longest one, like mine is, this indicates you’re on the right track, but you need to keep working at your negotiation skills. The following tips will help you flex those negotiation muscles and keep working at it.
If your third column is the longest, then it’s probably time to start dipping your toe in the negotiation waters. The following tips are especially for you!
If your fourth column is the longest, this isn’t automatically a good or a bad thing. Consider whether you’re actually saying no to opportunities that could turn into something quite lucrative … or, on the opposite end of the spectrum, if it would be helpful to find ways to screen out low-paying clients earlier on.
Step 2: Know What You Need
Now that you have an idea of where you are on the negotiation skills spectrum, the next step in the quest to strengthen your skills is to find out what you need to thrive in your freelance business.
As “Marketing Mentor” Ilise Benun says in one of her excellent talks on negotiating, when thinking about negotiating, it’s better to focus on your need rather than your worth, because the former is much more objective than the latter.
What’s the best way to calculate what you need from your freelance business? Calculate your minimum hourly rate.
For this, you need to know:
- Your monthly expenses
- Your tax rate
- Your desired profit (e.g., 20% or 30%)
- Your monthly billable hours (i.e., hours you can charge for)
There are many online calculators to help you figure out what your minimum hourly rate should be. My personal favorite is from B2B copywriter Steve Maurer, who made this downloadable worksheet based on the principles in Ilise Benun’s program, Simplest Guide to Copywriting Projects.
So, tally up your expenses, plug in your numbers, and you may be surprised by how high your minimum hourly rate is.
You don’t need to actually quote an hourly fee for this to be useful – you can easily use it to calculate your project fees.
Either way, you’ll be much more prepared to negotiate a fair deal for yourself, if you know what you need.
Step 3: Study Negotiating Strategies
The third step to honing your negotiating skills is to read up on the subject. (You’re here, which is a great first start, but this is just the beginning!)
What I’ve learned over the past couple of years comes from reading and watching the resources in the following list:
- Ilise Benun’s excellent talk on worst negotiating mistakes and how to avoid them
- Ilise Benun’s article on 3 things to keep in mind when talking about money
- John Torre’s article on how to improve your negotiating skills
- Jay White’s article on 7 words that can instantly add $1,000+ to your copywriting fees
The tips I’ve learned have earned me $10,000 and counting … without even breaking a sweat!
So, this month, commit at least 30 minutes to an hour a week to studying these and other negotiating strategies. That way, you’ll get into the mindset you need to truly value yourself and the services you’re offering.
Your thinking will begin to shift, so you’ll start to realize negotiating can actually be a fun part of the freelance life, rather than a chore.
Step 4: Do a Mock Negotiation
Now, it’s time to put it all into practice!
In this step, you’re simply going to role-play. To do this, imagine different scenarios in which you’re trying to get a client: maybe you’ve reached out to them with a proposal, or maybe they’ve contacted you.
By yourself or with a friend, talk through what you would say when the money conversation comes up. Try out different strategies you learned from the resources in step 3, testing different questions and responses. Like …
- Could you tell me what your budget for this project is?
- I’d like to ask a few more questions, and then I’ll get back to you tomorrow with an exact quote.
You may feel a bit ridiculous talking to yourself, but saying these phrases out loud will make it feel much more natural when you’re in a real negotiation.
To test your responses, bring in a spouse or a friend. They can help give you feedback on how you sound and help you come up with different scenarios to practice.
Step 5: Turn on “Creativity Mode”
As freelancers, we often hear we need to know how to say no. We should walk away when an offer is too low, or when a client is simply not worth working for.
But sometimes, saying no can be taking the easy way out. And, if we get too used to saying “no,” we could be missing out on opportunities that are, at the very least, worth considering.
If you find it super easy to say no and think you might be missing out on some interesting opportunities because of this, try turning on “creativity mode.”
Maybe the project at the quoted price isn’t worth your time – but perhaps you could rework the scope or timeline of the project to suit both you and the potential client.
Or, maybe you do have the time to take on the extra project, and all you need to do is make sure the project pays enough to make it worth your time and effort.
When something genuinely isn’t worth your time, it’s great to say no.
But, if you say no as a knee-jerk reaction, see if you can find ways to turn a no into a yes, for the benefit of both you and the client.
Going Forward: Look Out for Opportunities
Now that you’ve taken stock of your negotiation history … calculated your needs … read up on strategies … and spent some time practicing them … it’s time to make use of them.
Going forward, look for any and all opportunities to get better at practicing your new skills.
Is a deal on the table? Make sure to ask for more. Is it long past the time to your raise your rates with an existing client? Find a way to bring up the subject.
Getting comfortable and skilled at the art of negotiation takes time. But, as we’ve seen, putting this skill into practice could literally earn you hundreds of thousands of dollars over the course of your career.
I’d say that makes it well worth the effort.
This article, Business Challenge: 5 Easy, Low-Stress Steps to Hone Your Negotiation Skills, was originally published by Wealthy Web Writer.
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