How to Talk to Clients About Money
Do you find it difficult to talk to clients about money? Do you wish you could just do your job without having to talk about fees, deposits, retainers, or progress payments?
It’s easy to understand why we don’t like talking about money. We’re taught from an early age that it’s not polite. When was the last time you asked someone, “How much do you make?” Probably never, right?
But if you’re in business as a freelancer or agency owner, you have to talk about money. If you’re uncomfortable doing it, you’re probably undercharging.
Let’s talk about money now.
Money and the Transition from Part-Time to Full-Time Freelance
Many creators start as employees doing freelance work on the side. This is often the root of later money problems.
If you have a full-time job and you’re freelancing, you may look at the freelance income as “extra money” that supplements your salary. So, you might be calculating your estimates at an unrealistically low rate. You’re likely spending too much time on projects for what you’re charging.
At that point, you don’t care that much. Your freelance money feels like a bonus on top of your day job salary.
But once you start your full-time freelance business, that kind of thinking is dangerous.
You’ve gotten into a bad habit and allowed yourself to be casual about your estimates and how much you’re earning.
It’s time to take money talk more seriously. You’re not a charity.
Talking About Money Takes Practice
Like any other skill, there’s no substitute for practice and repetition. In the end, it comes down to confidence. You’ll learn to get over the uncomfortable feeling and realize that it’s just an aspect of doing business.
If you’re challenged on an estimate and immediately back down and offer to reduce it, you’re playing a losing game. You’re doing that because you don’t want to discuss money. You hope that by reducing the amount, you no longer have to talk about it. Right?
Ideally, you should be unemotional when talking about money. It’s merely a form of exchange so that projects can get done.
Clients need to feel that it’s a fair exchange. You should be ready to discuss and support your estimates and invoices in a way that makes sense to the client.
Think about how other businesses operate. If you go into a clothing store, everything has a price tag. They’re not at all embarrassed about asking for your money.
If you meet with a lawyer or any other professional and outline the work you want done, they’ll be quick to tell you their fee. It’s just business, not personal.
Adopt a Business Attitude
It’s important to remember that you are here to serve your clients as a creative business person, but you’re not their servant. You have the choice of whether to work with a client and how much to charge for your work. It’s your business.
It’s also critical to remember that not all clients are right for you. They may not understand why your fees are different from others or how you deliver your projects.
As a business, you should dictate how you work and how much you charge. Also, you don’t have to charge all customers the same way. Once again, your business, your rules.
All of this takes practice. When you’re beginning, you’re going to make mistakes in pricing, in how you deliver jobs, and in taking on projects you shouldn’t have accepted.
But ultimately, your goal should be to develop repeatable processes and pricing that work for you and your clients.
Keep in mind that clients are accustomed to dealing with suppliers and vendors of products and services. They get estimates and invoices from all of them. Your clients deal with money all the time. In the end, you’re just another business to them. So, don’t be afraid to have straightforward discussions about money.
Take Control of the Budget Discussion
When a client is briefing you, sooner or later, the question of money will come up. Why not make it sooner?
Once you have an idea of what the project consists of, ask the client about their budget for the project. Ask them before they ask you for an estimate.
Why? Having a defined budget is an indicator of how professional they are. A serious client will have a number or a range in mind. Do they think this is a $2,000 or $500 project? It’s good to know at the outset so that you can shape the rest of the discussion. Then you can decide whether or not you want to provide a detailed estimate.
What if they don’t want to give you a budget? You have to decide whether or not you wish to invest the time to write an estimate. Is it worthwhile, or will it be a waste of time?
Here’s one more tactic you could use to get a number. Say, “I can’t give you an estimate right now on your project because I need to sit down and make sure I include everything you need. However, from what we’ve been talking about, I can tell you that I’ve done similar projects for other clients that have ranged from $1,500 to $2,000.”
Watch for their reaction. Try to get at the budget they have in mind.
If they still don’t want to talk about money, I’d take it as a red flag. To me, that signals trouble ahead. Any serious business person will talk about budgets and money in general.
How to Avoid Some Money Talks by Moving to Project-Based Billing
Here’s a way to reduce the number of times you have to talk about money. Change from hourly billing or charging by the word for copywriting. Adopt project-based billing instead.
Your goal is to get a complete project brief and provide an adequately detailed estimate for the whole project.
You’ll avoid haggling over your rate, how many hours you’re estimating, or how much you’re charging per word.
Instead, you’ll write an estimate describing the project without getting into how many hours, how much per hour, or how many words. Treat it like a thing. This thing, your project, costs $X.
Moving to project-based billing also means you don’t put rates of any kind on your website.
Even if you’re doing several projects that, on the surface seem the same, they may still be different enough that you’ll vary your estimates.
For example, let’s say you’re writing blog posts for a client. In most cases, they give you all the material you need, and you charge $750 for a typical post.
But on your next job, you also have to do substantial research to write a post of the same length. Your billing should reflect the work involved. That’s why you don’t want a flat per-word rate.
Another Reason for Project-Based Billing—You’ve Become More Efficient
Here’s a reason not to charge by the hour. If you’ve become more efficient at doing certain types of projects, you should benefit from it. What used to take you four hours now takes just two.
You want to charge by the deliverable, not by the hour, to capture the benefit of your efficiency.
Read about the best pricing models for creative services and why project-based billing is the best route for many creatives.
With the Right Clients, It’s Easy to Talk About Money
Once you get repeat clients that you enjoy working with, money talks are much easier. In most cases, you’ll understand their requirements, and they’ll agree with your estimates. There may still be times when your estimates are higher than their budgets, but you’ll work it out.
Client, “I got your estimate for $1,000, but I only have a $750 budget for this one. Can we figure this out?”
You, “Sure, let me have a look. I’ll try to make this fit a $750 budget.”
Then, find ways to trim the project requirements and get back to the client. They may agree, or when they see your suggestions, find the additional $250 to do the whole project.
Clients can often juggle money between projects, taking “leftover money” and adding it to another project if necessary.
If you find yourself constantly debating costs with a client, it could be a sign that it’s the wrong client for you.
On the other hand, if you have extensive money debates with most of your clients, you may need to re-evaluate how you bill. Business shouldn’t be that hard.
I wrote about the best clients for freelancers here.
When Not to Talk to Clients About Money
There are times when you don’t want to talk to clients about money—at least, not too specifically. Here are a couple:
Scenario 1
The client calls you up and gives you the outline of a project on the phone and asks, “How much?”
Don’t answer. Even if you ask a few more questions to get additional details about the job, it’s still not a proper briefing, and you haven’t created an appropriate estimate.
Your answer should be, “Let me pull together an estimate for you just to make sure I’ve covered all the deliverables. I can get that for you by tomorrow.”
When the client has had a chance to review the estimate, they might change or add to some of the deliverables, which means you’ll have to revise it anyway.
Scenario 2
The client asks whether you can do a project that is very similar to one you did last month but with just a few minor changes.
They ask, “Do you think you can do it for the same budget?”
Once again, don’t answer the question directly. Your answer should be something like, “Can you send me an email with a bit more detail, and I’ll review the previous project? I can get an estimate back to you quickly.”
So, two things have to happen here. You want the client to detail whatever makes this different from the last project. They might be “a few little changes” or not. You also want to review that previous job to refamiliarize yourself with it and determine whether you made any money on it.
Once you get the details from the client, you can create a new estimate in writing for the client to approve.
In short, you never want to give a verbal estimate, especially to a verbal briefing. Ideally, you get everything in writing, and certainly, you give everything to the client in writing.
Read how to increase your billing with detailed estimates here.
Learn more about talking to clients about money in my book, How to Start a Successful Creative Agency. It’s the essential business guide for graphic designers, copywriters, filmmakers, photographers, and programmers.
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This chapter covers essential areas such as Clients vs. Projects, Corporate Clients vs. Small Business Clients, How to Create an Opportunity Document, Benefits of Finding a Niche… and much more.
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