Don't sell yourself short when you bid on contract work

You got your foot in the door. You're qualified, you're personable, and you're hitting it off with your potential new client. Then comes that magic moment when you talk money. What's your next move, hot shot?

You don't get what you deserve; you get what you negotiate. A lot of people in IT are job-hoppers. They follow the money. If you can handle the ups and downs and uncertainties that are part of the life of a computer consultant, you can make a lot of money. You only need two things to succeed: the ability to deliver the goods (your skill set) and a knack for negotiating.

I got a call recently from someone checking references for a close friend of mine who was being considered for a six-month Web development contract. "Yes, he's a great guy," I said. "When he worked for me, he made his deadlines, he was obsessive about quality, and I would recommend him without hesitation."

My friend called me the next day to thank me for the reference. I knew that over the last year or so this guy had been asking and getting £50 per hour to design Web pages. I assumed he'd get at least that much on this contracting gig. (Granted this sounds like a low figure for Web design, but we're not talking about e-commerce solutions—just good old-fashioned brochure pages. You who live in markets where you can get $100 per hour and up, enjoy the gravy train while it lasts!)

But when I asked him about the money (yeah, I'm nosy), he told me this story. The interviewer asked my friend, "What's the lowest amount you'd accept for this job?" (Don't you hate that question?)

My friend replied, "£20." The interviewer immediately said, "That sounds good." As it turns out, my friend got the gig, and they signed him up to get paid £22 per hour—they graciously threw in an extra £2.

"What the heck happened?," I asked. "I guess I was nervous and I freaked out," my friend said. "I might try to get 'em to pay me more after I've been on the job a while." I'm thinking to myself, "Fat chance."

You can always lower your price, but...

As all smart consultants and horse traders know, you can always lower your asking price in a negotiation, but it's nigh on impossible to raise it. My friend was afraid of pricing himself out of the job if he asked for too much money. But the matter of price boils down to these issues:

If my friend had asked for £50 per hour, the interviewer might have said, "That's too much" or "We can't afford that." Then my friend would have had the upper hand in the negotiation. He could have said, "Well, what can you afford? What's the offer?"

He could have pointed out that he's been getting £50 per hour for the last year. He could have used that proven value in the marketplace as leverage. He could have said, "Look, I'm worth it. But I'll tell you what. Maybe we can reach a compromise that we both can afford." He might have negotiated £30 or £40 per hour out of the deal.