Life On Contract: Lowering Your Cost without Dropping Your Price

Last time in Life on Contract, I discussed ways to figure out a starting point on how much to charge for your services. However, sometimes you and a client may wish to work together but for some reason they cannot (or do not wish to) pay what you have decided to charge. If you are inexperienced, it can be tempting to assume you have overpriced yourself and discount down to what they are willing to pay. But if your price is a number you have chosen for reasons you can explain, dropping it is not something you should do unless you have thought about it carefully.

Instead of just agreeing to do the same work but for less money, it is often possible to offer a lower overall cost without cheapening the value of your work. I’ll share a process I use to find opportunities to make this happen.

It Should be Win-Win, Not Hard Sell

The best case scenario is a client wants your service, your cost is within their budget, and everyone agrees to work together. Tragically, the process isn’t always that smooth. If cost is an issue, the alternative to lowering your price is to fine-tune what you provide to better fit the actual needs. To do that, you will need two things:

  1. A detailed understanding of your own time and costs for the work.
  2. Knowledge of what things your client considers most important.

By intimately knowing your own costs, you can figure out where to make savings without scrimping on the things your client considers important.
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Life on Contract: How Much Do I Charge?

If you’re comfortable with the technical side of becoming a consultant or contractor but are unsure what to charge for your services, you’re not alone. “How much do I charge?” is a tough question, made even tougher by the fact that discussing money can be awkward, and at times virtually taboo.

As a result it’s not uncommon for the issue to get put off because it’s outside one’s comfort zone. Technical people in particular tend to suffer from an “if you build it, they will come” mentality; we get the technical side of things all figured out and just sort of assume that the rest — customers, money, and so forth — will fall into place afterward. If you’re lucky, it will! But it’s better to do some planning.

The short and simple answer of how much to charge is a mix of “it depends” and “whatever the market bears” but of course, that’s incredibly unhelpful all by itself. It’s time to make the whole process of getting started a bit less opaque.

A stubborn determination to solve my own problems has given me plenty of opportunity to make mistakes and commit inefficiencies over the years; I’ve ended up with a process that works for me, but I also happen to think it is fairly generally applicable. Hopefully, sharing the lessons I’ve learned will help make your own process of figuring out what to charge easier, or at least make the inevitable blunders less costly.

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Life on Contract: Hacking your Taxes

You’re a contractor and people are paying you to work in your pajamas. It’s a life of luxury, but when tax time comes, you are in a world of hurt and you wonder why you even do it. Taxes are tricky, but there are some tools you can use to make it less painful on your pocketbook. With planning and diligence, you can significantly increase the amount of money that stays in your bank account. Continue reading “Life on Contract: Hacking your Taxes”

Life on Contract: How to Fail at Contracting Regardless of Skill

I believe higher quality learning happens from sharing failure than from sharing stories of success. If you have set your mind to living on contract, I present this cheat sheet of some of the most simple and effective ways to muck it all up that have surprisingly little or nothing to do with your technical skill, knowledge, or even deliverables.

The previous installment of Life on Contract discussed how one might find clients as an engineering contractor or consultant while also taking a bit of time to pull apart the idea of whether life on contract is appropriate as opposed to, for example, bootstrapping a business instead. Assuming you are set on working as a contractor, let’s talk about what happens after you have found a prospective client (or perhaps more likely: after they have found you.)

WARNING: this article features an utter lack of success tips and tricks. Partly because those can be found in any seminar or business self-help book, but mostly because I do not have a foolproof recipe for success, and cheat codes to unlock easy mode still elude me. But I have witnessed (or committed) and reflected on many excellent ways to fail at contracting; or at the very least succeed in not being invited back.

Just because I won’t be sharing success stories doesn’t mean success has no learning value. Got a success story, or a better way to fail? Tell us about it in the comments!

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