Recent Posts

January 24, 2011

Rookie mistake: undercharging

Almost exactly one magical year ago, I started a freelance writing business. I work with companies in San Diego, writing their web copy, marketing materials, Twitter and Facebook pages, and figuring out creative ways for them to reach their customers. The good news is

1) I'm loving it. It's challenging in ways I would not have expected and the people I'm working with are fantastic.

2) It's going well!! My goal is to be in a place where I need to hire my first employee within the next three months.

3) It's really forcing me to sharpen my negotiation skills, because every project, client and task is different. The more time I spend on this job, the more I know exactly how much time A or B will take me and what service Y or Z is worth to clients. I've started standardizing and creating packages, but there's still a lot of variation.

Well. A few months back, someone asked me to submit a proposal for something I'd never done before. I had nooooooo idea what to charge. I looked online, and prices there started at $1500 and hit $5000 for that project.

And you know what I did? I charged $1500. Figured, "I've never done this before, so it's fair to the client if I keep things on the lower side. That way, I get experience and the next time I do this kind of project I'll be justified in charging more."

Here's where things went awry. Very awry.

1) First, the client negotiated! Asked for a discount because of his budget. I caved. I thought, "You're a small business, my heart goes out to you. I totally get what it's like to try to maximize every dollar. In fact, I respect you for asking!" Foolish entrepreneur.

2) Second, the project took longer than I expected. The actual writing time wasn't out of control, but all those emails. And meetings. And research. And phone calls. And delays. If I add everything up, I think my hourly rate drops by a factor of three.

You can imagine that this was not my favorite project or client -- and it's a pity. The work was interesting and our personalities meshed. But I shot the whole thing in the foot by being so damn cheap.


1) I was wrong to think of myself as a newbie. Sure, I've never written that kind of document before, but I've written hundreds of thousands of words, meaningful words, that got the job done. If someone asks me to make a souffle or fix a jet engine, I will charge bottom dollar or better yet, refer him to someone better. But for any kind of writing task, in the English language for the U.S. market, I've realized that I should charge more than bottom dollar. A lot more.

2) I was wrong to simply look online. Those quoted rates were tragically unidimensional. Even if the services were described in detail, I have no clue: who are that consultant's clients? How professional is she? Does he cut corners? Is that work actually farmed out to India? etc. A better move would have been to call a handful of seasoned pros in San Diego or similar markets, explain who I am and what I do, and ask for advice on pricing that service.

3) From now on, I've factored in a project management fee. People who don't want to pay it must have never worked with a contractor before or are more trouble than they're worth.

4) I will never EVER offer a dirt cheap quote again. Ewww.

5) On the flipside, as a buyer, I'm reminded that sometimes it doesn't make sense to negotiate. If you're getting a great deal (aka good quality for low price) from the start, it means that service provider is being generous. By trying to push the fee even lower, you risk souring things and... getting your money's worth.

Next post: a negotiation that went great.

A question to all who set fees for projects: Has this ever happened to you?? And, curious: do you factor in a negotiation buffer, in case people try to shave off 10 percent or so?


January 19, 2011

What selling taught me about buying (and vice versa)

Not my parents, but they might just be someone else's
After years of asking as a buyer, now I'm discovering what it's like to be batting for the other team. Let's give it up for... The Sellers!!!

In the next two posts, I'll share two negotiations I recently undertook: one where I undercharged the client and one that turned out great. But first, an intro.

Maybe people in business school or with parents who ran import/export companies understand business negotiation intuitively. I grew up with two bohemian, nerdy immigrant parents (I mean that in the best sense possible, Mumsie and Daddums) who in turn grew up in a cruddy communist regime with no lemonade sales or other chances to practice being entrepreneurial. One is a computer analyst and the other an architect. Hence until I was 22 I thought networking was something you did with the extra wires in your house. And sales are things you go to.

So from a total newbie perspective, here's what I'm discovering about being a seller.

Revelation: Selling is not that different from buying. 

I'm still looking for value. When I buy, that means maximizing the goods, time or services I can get for my investment of money. And when I sell, I'm trying to maximize the money I can get for my investment of goods, time or services.

I'm still using empathy to come up with the best outcome. Selfishly, empathy lets me consider the other side's situation, motivations and resources, thereby giving the me bargaining chips I need to get what I want. Altruistically, it helps me come up with solutions that satisfy both sides and are fair and humane. For example, I charge people with limited means less, in the same way that I wouldn't ask for a huge discount or free services from someone who is struggling or in a position of less power than me.

I'm still negotiating every transaction, empowered by the belief that the other party is a free agent and can always walk away or make a counteroffer. 

I still believe that I am worthy. Of quality goods or services at a price I can afford; and of compensation that matches my talent, credentials and the value or benefits I bring to the table.

But there are two big differences between buying and selling.

The first is supply. Unlike when I'm shopping and there are 100 other boutiques or plumbers or airlines around the corner. When I'm selling, I'm lucky if there are 3 clients around the corner. For now, at least.

How does that limited supply change things?

Well, most businesses I deal with don't "eject" clients. (At least, maybe I've never gotten drunk or naked enough. In public. Next to minors. While shouting obscenities in French.) But clients eject businesses all the time. So once I have a client, I work very hard to keep her. I'd be willing to go to certain lengths to offer exceptional value to a returning customer -- including discounting my services for the right project/client or offering extra services as an occasional perk.

Second, I have to be very thoughtful about pricing services. That's different from when I'm buying, because I already know the value of most things (and if I don't, a few moments on Google yield the answer). How much I spend depends on my budget, how much I want or need the item, and how much the market and merchant are asking. But when I'm selling, my price is a function of what I can bring to the table, how much time or effort I invest -- but ALSO on their budget, how much they want or need the item, and how much the market is charging. Too. Many. Variables. Aaaaaaa!

Putting it all together, here are two big two takeaway points:

When you're buying, leverage the seller's insecurities.

1) Limited supply of clients and effort to line up new business

Next time you're reevaluating your expenses on a cell phone, salon, or shrink, remember: you're worth a lot more as an existing+future client than a potential client. So if they know what's good for them, they'll work extra hard to keep your business. In fact, the best time to ask for a discount or break might actually be after you're their client, not before!

2) Concerns they are overcharging

Don't underestimate the power of this line: "I'll be honest: I'm considering working with one of your competitors  I like what you have to offer, but can you come down on the price?"

When you're selling, channel the buyer's confidence.

Remember what it's like to be a buyer and use those same skills to sell. Protect your assets, maximize the value you obtain, and be confident that if you've done your homework about the market and you know the benefits you bring to the table, then you're worth every penny you charge.

If you can bargain down a car or get 10 percent off at Marshall's for a skirt with a stuck zipper, there's NO reason you can't also be great at asking for more money at work. Juts flip the mental switch and get in seller negotiation mode. It's really the same thing as buying -- only you end up with more money in your pocket at the end of the day!

January 17, 2011


Last week I was in Houston for my step-brother's wedding. I got back a few days ago, and I just realized something.

For the first time since 1996, I don't have any airplane tickets or road trips lurking around any corners. No more college or grad school travel, summer internships in distant cities, weddings, vacations, weekends away. For the first time in the second half of my existence on this good earth, gentle reader, I am in San Diego, home. Indefinitely...

And it feels strangely good.

Strange, because I have never imagined I wouldn't want to hop on the next plane anywhere. Strange, because I left San Diego for college thinking I'd never move back. It was a very different city in the late 90s -- approximately 322% lamer. But I moved back in 2008, and to my amazement I haven't been bored a single day. In fact, this city rocks. Even after two years, there are museums I still need to explore, restaurants I have yet to try, and SoCal rituals to experience (watching the grunions, blowing off work on a Tuesday and going to the beach, buying overpriced real estate, recalling my governor... what else am I missing?).

Oh yes, and askings to report.

If you've been reading this blog for a while, you know by now how I operate: disappear a week or two and gather stories to tell, then publish a bunch of updates. So... it's update time.

More soon!

[image credit:]

January 03, 2011

12 things every woman should ask for in 2011

How were your holidays?

Mine were lovely. Friends and family visited... I ate way too many stuffed grape leaves (a Romanian Christmas tradition)... caught up on sleep I didn't know I was missing... spent a couple of days at a cabin working on a writing project that has me captivated and obsessed -- you'll hear more about that, later ;) -- and at the turn of the decade, celebrated with Mr. A at a blacklight eurotrash party.

And now, for the list.

I've been writing this list in my head for weeks, wondering what's essential and what's dispensable. I feel I finally have it right: The 12 things that you really must ask for this year. I wrote it for the Forbes column I contribute to, She Negotiates, and today they published the first half.
Asking is the first step in negotiating.
Asking identifies a need or want and locates a resource or opportunity to measurably better your position in the universe. Asking isn’t selfish, unless you do it selfishly. It’s not reckless or callous, unless you walk all over people to get to what you want. And it’s not a zero-sum game, unless you treat your request as the end of the conversation rather than the beginning.
Responsible, thoughtful asking gives you an equal shot at happiness with all the other askers out there. Because believe me: there are a lot of us, and our ranks keep growing.
Whether you’re an experienced negotiator or just starting out, this list (together with six more tips I’ll post later this week) is designed to help you define and meet goals in your financial, professional and personal lives. Try one item per month, or get a head start and tackle a few at a time.
1. Ask for a raise.
Asking for a raise in a down economy is hard — but then, who says it’s ever easy? According to a plethora of blog posts and articles on this subject, now is as good a time as any to reevaluate your compensation and make sure you’re being paid fairly. Executives have had no qualms about boosting their pay, and you shouldn’t either, particularly if your company has downsized and you’re picking up some extra slack. That makes you even more valuable.
2. Ask for recognition.
“You did a great job,” someone will say, and the answer from too many women is, “It was nothing.” Or my favorite response, “It was a team effort. Peter and Danica were so innovative.” It’s even more frustrating when I hear myself doing this despite knowing how damaging that is.
Please, do us all a favor. The next time someone compliments your hard work, great idea or contribution, smile and say thanks. Then zip your lips. By the way, if you’re not getting recognized, check out this site for concrete suggestions about how to elegantly turn the spotlight on your achievements.
3. Ask for a break on one major annual recurring bill.
If you can shave off $18 off your $118 Time Warner cable bill, that’s enough cash for a little bauble from Nordstrom Rack or, if you add up the savings across the year, a student loan payment. When all it takes is a phone call, there’s no reason not to try. Look at your monthly expenses and pick the one bill that makes the biggest dent.
The rest of the list is at Forbes.

In other news, I have some professional and personal askings to recount from the past weeks... and a contribution by Mr. A.

More on that, in the next day or so.

Wishing you a whatever-your-heart-desires 2011,