Finding the Funding for Your New Client Projects
by Adele Sommers
Do you have difficulty engaging in budget conversations related to new client projects, particularly during initial meetings when it can be quite tempting to make promises that could be very difficult to keep? If so, you’re not alone! This article explores five ways to help you gracefully avoid backing yourself into a corner.
It All Starts out Innocently Enough…
Imagine that you’re meeting with prospective clients for the first time. You’re bubbling with anticipation about the possibility of launching a mutually rewarding working relationship that will produce gratifying follow-on engagements.
You listen carefully as the clients explain the project that requires your attention. At the end of the discussion, you feel confident that you and your team can meet or even exceed the clients’ expectations.
After all, the project seems perfectly suited to your team’s repertoire of expertise, and you already sense an excellent rapport emerging. You have a tremendous desire to help these people and make them so supremely happy that they will request your group’s services again and again.
In your mind’s eye, you can see the project fully completed. The delivered outcome works beautifully in your imagination. With delight, you describe this vision to your clients, along with the benefits the results should bring. The clients appear thrilled with your concept and can’t wait to get started. It already feels like a “done deal”!
But Moments Later, a Delicate Dance Begins…
The clients mention having a limited budget. So limited, in fact, that you have no idea of whether you and your team can complete the project within the financial constraints. Yet, on some level, you feel very committed to the outcome you had just described moments before.
You experience an overwhelming desire to remain fully consistent with what you believe you just agreed to, even though this new feeling of “commitment” preceded any discussion of schedule or budget.
So, when the clients state that they just can’t budge on their budget, something inside of you whispers, “Well, why not go for it anyway? If we know anything at all about what we’re doing, we should try to deliver it within their price range!“
Five Techniques for Reframing a New-Client Budget Discussion
To reduce the likelihood of unintentionally agreeing to an unrealistic arrangement, particularly when courting a new client, below are five approaches that you can mix and match to create a win-win situation. Having these ideas prepared before you meet can help you smoothly and gracefully handle these situations.
1) The “introductory package” offer.
Many businesses gain new clients through introductory packages of their products or services. This means that they complete very specific chunks of work, such as designing a logo or setting up a Web site, at specially discounted prices. Note that these discounts apply only to certain services, and not necessarily to an entire project.
Benefits: Once your new clients have experienced a good starting sample of your work and have come to know, like, and trust you, they may be much more inclined to request further assistance from you at your regular rates.
2) The “test sample” technique.
When you’re really not certain how long an effort would take because there are too many unknowns, you can offer to produce one or more “test samples” of the work (such as editing one chapter of a complete manuscript) to see what it entails before committing to the entire project.
To create the test sample(s), you could propose working to a not-to-exceed price that may or may not be a discounted rate.
Benefits: This approach is especially useful if the clients’ content, terminology, technology, and/or other factors are new, dynamic, or otherwise difficult to gauge without further exposure to the material.
After reviewing the completed sample with your clients, you’d be able to estimate the remainder of the project with much more accuracy. The clients also can decide whether your production style is an ideal fit for their needs.
3) The “level of effort” approach.
Sometimes a client might not have much funding up front, but could finance a greater expenditure over time — much like a recurring “monthly allowance.” In this case, you could offer to do the work on a level-of-effort basis, not to exceed a target number of hours per billing period (say, 20 hours per week).
And if the volume of work of turns out to be substantial and steady enough, you might even be able to flexibly adjust your rates, since you won’t need to expend as much overhead on seeking clients and marketing your services.
Benefits: This approach tends to eliminate the need to create a detailed estimate for each task to be performed. It also keeps the flow of work relatively steady for you and makes monthly expenses very predictable for your client.
4) The “range of options” alternative.
When describing a vision of how you can best serve your client’s needs, offer to propose multiple options for achieving the desired results. This will communicate the message that you’ve anticipated the possibility of working within some kind of financial constraints.
In a subsequent presentation, spell out two or three ways of achieving the outcome you had described, each with a different price tag. In the least expensive approach, for example, you might deliver certain elements over time, with fewer features, or in a different format from the “high-end” approach.
Benefits: The low-end option might be perfectly suitable for the client’s needs, and yet the client could flexibly choose another option if more funding became available.
5) The “share of results” method.
If a project budget is practically nonexistent, consider whether accepting a share of the results (such as a percentage of sales) would make sense. If you can strike an agreement with your client in which you would split the profits in a fair, equitable way, you could carefully craft a written understanding that reflects this arrangement.
Benefits: This technique can be quite lucrative in situations where the shared results increase over time as your client’s business prospers from your work. It’s considered a type of “contingency financing” because the results are contingent on your efforts. If you can afford to offer your services this way, you all but eliminate the financial risk for your client, yet you reap the benefits when you do a good job. The downside is that your efforts could result in a financial loss if the sales do not pan out as hoped.
In conclusion, it’s not difficult to back ourselves into a corner with unrealistic budget arrangements when we’re highly enthusiastic about a new client project. Using one or more of the five reframing techniques, you and your client can find an ideal approach that serves both sets of needs with grace, dignity, and mutual gain.
Copyright 2018 Adele Sommers