Category Archives: negotiation

How To Stop Turning Down Work

It’s your sixth birthday and your grandfather has just handed you a ridiculously heavy package the size of a shoebox. You open it up to see that yes, it is a shoebox. A shoebox full of pennies.

“I’ve been dropping all my pennies in there each night since you were born,” he says. “I planned to give it to you when it’s full, and it’s getting close. There’s probably more than $200 in there. All you have to do is count them out into stacks of fifty and roll them in those little paper sleeves.” This was before the automatic coin counters appeared in grocery stores.

Your six-year-old mind reels at this windfall. You count and wrap until your hands are cramped. You beg you mother to take you to the bank to turn the pennies into “real money,” then straight to the toy store to get Frogger for your Atari. (Any similarities to the author’s life are purely coincidental.)

Flash forward to today. Someone offers you a box of pennies. All you have to do is count them by hand. You might still take it, but it’s not going to be such an obvious choice. How long will it take? What could I be doing instead?

Thinking small

For the mid-career freelancer, this is the calculation that dooms you to punching a clock. You could build that website for the local restaurant, but they want you to keep it up-to-date with their specials. You’re not interested in doing maintenance, and they can’t afford to keep paying your development rate. So you don’t take the work.

You just turned down a lucrative contract because you’re thinking like an employee. No, you don’t have a boss, but you still think that any hour you’re not working is an hour you’re not getting paid. To break this mindset, you need to start delegating. You need people working for you.

You’re making it as a freelancer because you solve people’s problems. When someone wants a site and ongoing support, they have two problems. You can solve the first by building the site, and the second by finding a qualified support person. There are plenty of online resources for finding contract technical workers. Don’t make your client go to these sites and try to evaluate people, do it for them.

Thinking big

Instead of selling a Content Management System that will allow a small business owner to update his own site, offer a one-stop service, where your employees will keep the site updated for a monthly fee. Do this enough times and your “passive income” could exceed your new development work.

But even if you don’t take a cut of the support fees, having the capability means you can bid on a whole new type of contract: the large kind.

How to negotiate a better contracting rate

In any transaction, the person with more information and more experience usually comes out ahead. That’s why the typical consumer negotiating with a full-time salesman is at a huge disadvantage. A car dealer, for example, might negotiate several sales every week, while you only do it every two to three years.

So people making big decisions — new car, new house, new job — do as much research as they can, trying to level the playing field just a little bit. And lots of the information they come up with is flat out wrong.

One of the most damaging pieces of advice to follow when looking for a job is to rely on a headhunter’s self-interest to get you the best rate. The idea – which seems quite reasonable on the surface – is that the headhunter’s commission is a percentage of your salary. Obviously they want this number to be as high as possible. It’s easy to believe that their self-interest lines up with yours.

The first flaw with this idea is that the headhunter doesn’t get anything if someone else gets the job. If there are multiple qualified applicants, you are on the wrong side of a bidding war. The contractor doesn’t want to price you out of the running, so the incentive is to lowball your rate.

The second flaw is that every day the headhunter spends searching for your perfect job is day they don’t spend finding a job for the dozen other people they’re working with. They make more money by placing more people than they do by placing fewer people at higher rates. 30% of $70k x 3 is more than 30% of $80k x 2. Their incentive favors the quick hit, not protecting your interests.

So what do you do about it?

  • Stop thinking of the headhunter as your own personal agent.

    They’re doing a job for you, but they are more interested in getting you something than in getting you the best thing.

  • Know what you’ll accept before taking the interview.

    Have a bottom line that you won’t go below. Based on what you hear in the interview, you may decide to demand even more to accept the conditions. But your lower limit should never be negotiable.

  • Ask what the range is for the position up front.

    There’s no point in wasting time on a position that you’ll never take.

  • Never give up something for nothing.

    If they want you to travel and you don’t want to do it, ask for extra vacation in return. If they want you to be on call, ask for comp time. Never give up one of your demands without getting a concession in return.

  • Get it in writing.

    You can’t deposit a promise in the bank, or buy groceries with verbal assurances.

So are all headhunters ready to sell you out at a moment’s notice? Of course not, even if onlyto preserve their reputation. But if you want to avoid being disappointed, you should never forget that your best interest only sometimes matches up with the headhunter’s interests.

Negotiation starts from confidence

It seems obvious when you think about it, but I don’t hear it said very often: The first step toward getting what you want is knowing what you want. You have to do more than recognize what you want, you have to be confident in it.

Here’s an example from my college days: I worked at a bar for a couple of years. On weekends, we’d have someone at the door checking ID. There were plenty of people who tried to talk their way in without any.

One night the regular doorman was late, and I covered for him. The first girl who showed up without ID smiled, batted her eyelashes and asked “pretty please?” I said something like, “Gee, I really wish I could, but rules are rules, etc.” She argued, I refused, she got mad … I’d like to chalk my behavior up to my youth and her smile, but the bottom line is I didn’t project confidence in what I wanted.

The next girl who showed up without ID (for some reason guys never tried this with me, I don’t know why) I just told her I needed ID or she couldn’t get in, sorry. She threw a quick pout, then left to find someplace else she could get into.

As I thought about this later I realized the first girl wasn’t mad because she wasn’t allowed in. She was mad because I gave the impression I might be open to negotiation but I wasn’t.

Moral of the story: Know which of your goals are negotiable and which ones aren’t. Never give the impression that one of the former might be one of the latter. Reasonable people can respect an honest difference of opinion, but will read indecisiveness as an opportunity to negotiate.

Update: I found another way of putting this, on Scott Berkun‘s site where he explains why things suck:

It’s the things that tease us, making us think they’ll satisfy us but then failing, that hurt the most.

He was pointing out that people don’t complain about things they don’t care about, but it works really well to explain what happened to me when I was working at the bar.