How to Negotiate With Contractors

Posted by Webmaster - February 22, 2014 - How To Tips - No Comments

Owning an online business, or any business, means outsourcing. Outsourcing and hiring contractors to manage specialty and administrative tasks gives you the time you need to focus on profits and your unquiet skills and strengths. However it can also add up and become more expensive than you’d like it to be. Before you hire a contractor, learn how to negotiate with them. This single skill can save you thousands annually.

1. Know Exactly What You Need – One of the challenges to hiring a contractor is that many times you just don’t know what you need. For example, you need a website but can you use a template or do you need an entire site from scratch? Can you use WordPress? Do you need hosting?

When you hire a website designer they may have assumptions built into their pricing. If you know exactly what you need you can hire someone to manage those specific tasks and nothing additional. You’ll also not be surprised with add on expenses.

2. Understand What They Need – Put yourself in the shoes of the person you’re negotiating with. What do they need? What can you give them that will make the negotiation process easier? You might immediately think that the only thing they want is a high rate. That’s not necessarily true. Some contractors may value autonomy, a long deadline, a deposit, or regular work over a high price.

For example, you might need to hire a virtual assistant for a project. While they may ask for $25 an hour, if you commit to a certain number of hours each month they may prefer the consistent cash flow and reduce your hourly rate. Negotiating is about creating a win/win situation for everyone.

3. Ask for More than You Want – This tactic provides you with a starting point to negotiate and gives you room to work with your prospective contractor. For example, if you want to hire a ghostwriter to write a book for you and you don’t want to pay more than $6000, tell the writer that you can’t pay more than $4000. They’ll come back with a different number most likely that will be higher than $4000 but probably not above your top number.

Remember that price isn’t the only point you can negotiate on. You can negotiate delivery time as well. Once you’ve reached an agreement, consider getting it in writing. This helps your contractor and you find a mutual level of trust and it protects you both.