Clients, freelancers, and small business owners alike find budgeting to be a tricky topic to digest, so don't worry. Finances have a strange effect on everyone!
In fact, freelancers have said that speaking about finances is one of the most uncomfortable discussions they have with a client, but it doesn't have to be.
That's why we'll be covering the ways you can ask your client about their budget without feeling uncomfortable.
But First, Why Is the Budget Conversation So Challenging?
Over time, money has become a taboo subject that makes people uncomfortable. The "money talk" has grown into something more than just talking about money. Psychologically, we feel that the answer to this discussion will reveal our values. Our values motivate our behavior, which is why it feels like such a personal question.
"What's your budget?"
"Does this fit within your budget?"
"What kind of budget are we thinking?"
These kinds of questions can catch a person off guard if they aren't prepared for it. Worse, for many clients, they can sound like you're invading their privacy if you don't build any context around these budget-related questions.
This can cause pushback, where the client resists revealing their budget.
On the other hand, freelancers tend to ignore asking this question right away because we wonder what the client might think of us. When we're discussing budget, the "money talk" no longer seems so simple when we already feel the need to brace ourselves from any kind of judgment.
And it's this fear of judgment from our prospective clients that keeps us beating around the bush in the sales process. This mental game causes both parties to dance around the question longer than they need to.
The good news is, finding out their budget range doesn't have to be difficult.
Should You Ask the Client What Their Budget Is?
It might be uncomfortable to think about, but the forever dance around the project budget shouldn't be normalized. As with most things in life, it's only uncomfortable until you're used to asking.
But keep in mind, as you're wondering about what their budget is, your potential client is also wondering what your price quotes are.
However, you also don't want to send your client the wrong message and upset your potential client either. We all fear being ripped off, so therefore, asking upfront about the budget comes with its benefits.
So what are the benefits of asking about the budget?
Often, freelancers and small business owners tend to over-deliver to please their clients. While dedication and professionalism can land you a recurring client, this can also limit your career and financial growth if you aren't being paid fairly.
As a freelancer or small business owner, you have to be careful about getting lost in the cycle of financial and budget secrecy. Here are some benefits to asking upfront:
- Saves Time: If your price quotes are nowhere near what their budget is, it's best for both parties to know in the beginning so you can each move on to find solutions that will suit your financial needs.
- Project Scope: By asking about the budget, you can decide if you want to limit the scope of the project so you can better balance their budget with the project scope. This gives you a better idea of the deliverables and how to manage the client's expectations.
- Budget Raising: Asking early can open the door to them raising their budget. Clients want to know that you have a genuine reason for your price quotes and that you're not just trying to squeeze more money out of their pockets.
If you become more of an open book, you can expect the same from your client. Asking about the budget is a logical question to help both parties avoid unwanted mistakes and revisions. And one of the top strategies to ensure a happy work relationship in the long run.
Remember: Transparency will get both parties to the top.
Why It's Important to Know the Client's Budget
The importance of knowing a client's budget is few-fold and often overlooked or simply brushed over. Perhaps they think it is too forward to ask or assume their quotes will come in too high.
When freelancers and business owners don't ask for more clarity around this issue, it does both parties a disservice.
Knowing the client's budget beforehand indicates whether you should take the next pitch to continue working on the project. Besides, there's no point in wasting time creating a master proposal and then realizing the client has no money to put on the table.
There are more important fish to fry than being undervalued. Believe in the quality of your work, trust your gut, pluck up the courage, and understand what you are in for.
How to Ask A Client What Their Budget Is
Ease Into the Money Conversation
You don't have to be afraid to ask about the budget. Keep in mind that the cost of the project is equally on the mind of your client, so by asking you can open the door to a conversation that both of you are curious about. Nevertheless, you should avoid immediately diving into the subject of money at the start of your proposal.
Instead, begin your proposals by expressing genuine interest in the project so your client knows that you're excited about the work. This will ensure them that the price quote isn't a matter of being greedy. You can begin by talking about the project details such as:
- Client goals
- Target market
- Brand voice
- Final vision
And let your client know that you're familiar with all the components of the project scope.
Understanding the full project scope will help you customize your proposal to the team's satisfaction and will allow you to cover all of their necessary pain points.
Ask Open-Ended Sales Questions
It's easier to view this topic through our own experience than it is to think about the client's point of view. But, for a moment, let's put ourselves in their shoes. Just as we're wondering if we'll be judged for setting prices too high, the client is wondering if they'll be judged for their project budget.
One of the best ways you can pop the "budget question" is to start off with a few open-ended sales questions. During a "discovery sales call," you can ask questions that will get the client to open up about their business. Many times, a client doesn't feel comfortable discussing money because they don't know you well enough to feel comfortable talking about that subject matter.
Here are some easy questions you can ask:
- Could you tell me more about your business?
- What motivated you to take this call with me?
- How long have you been in business?
- What are your business goals over the next six months?
- What are some of your expectations from my services?
The number of questions you could ask is endless, but each question should help lead the client to understand where your money figures are coming from. However, you want to be careful not to phrase any questions that come across as being nosy. You never want a client to feel bad about the price of their budget if that's all they can afford.
As you ask more open-ended sales questions, you'll help your client feel more comfortable talking about their budget range with you. You can guide the client into the budget discussion with questions like:
- "What kind of project budget could we expect to work with?" Explain why you need to know this information. You can say something like: "This will let me know what I can do to meet your needs and the timeline I have to work with." This gives the client a reason for why you're asking beyond wanting to know how much money you'll make.
- Have they worked on similar projects before? If so, you can also ask them about the resources they've dedicated to other projects. This information lets you know what they consider to be a realistic budget.
Help Educate the Client
As previously mentioned, clients won't always know how many resources it takes to develop the plan, product, or project they have in mind. In truth, you can't always expect it from them either.
They are experts in their field, not yours, and presumably don't know what to expect. They might not realize that the number in their head is an unrealistic expectation. Consequently, it is your responsibility to make sure you share budget details from your side.
If a client is hesitant to pay what your skills are worth, you can address the budget concerns by referencing successful projects you were involved in. When you share previous results, you can instill trust and help your client reevaluate their offer and expectations.
As long as you're clear in explaining to your prospective clients what your process entails, you can better avoid budget limitations.
Focus On What Value You Offer
As a freelancer, it can be easy to find yourself in a position that leaves you feeling undervalued. Especially, if you're held back by the fear of not getting the job. When you begin seeing how vital you are in the process, you can start to understand the value of the work you offer clients.
Freelancing is the new trend, but that doesn't mean you have to compete with others to work for the lowest price point. With many clients now hiring freelancers to do the job, you need to differentiate between quality and price.
Just bear in mind that corporations have invested heavily in agencies in the past, so upping your rates will probably not compare to what they usually see.
Do your research and Google your industry's rates. If you know what you provide and what the industry standards are up to, you can back up your quote with market research.
Also, you can leave a little bit of wiggle room in case your client wants to negotiate. Knowing your worth will help you establish a minimum fee that will aid you when the negotiation phase arrives.
Speak to the Right Person
Depending on the size of the client's business, you may be dealing with a single individual or a corporate hierarchy. If you speak to the wrong person, any budget-related queries will fall on deaf ears.
When trying to land a potential client, take some time to understand the role of who you are speaking to in the discovery call. Does this person have any influence on the budget decisions? If not, they may be one of the multiple people you'll need to speak with to move the project forward.
If that's the case, your client will let you know that they aren't in charge of the project's budget. So, before you jump into negotiations, try to find the financial key holder on the project. If you're unsure of how to find the right person, you can simply ask your current connection about who the right person would be to address the budget.
Inquire About Previous Projects
Another way you can settle on a budget is by gauging your clients on their past projects. You'd be surprised how helpful this is! Asking about the specifics of the teams involved, their process, and expectations of past projects will help you compile a quote.
You might even know some of the previous freelancers or small businesses they mention, which can help you provide insight into their rates, the budget estimates, and what you can charge.
Money-talk aside, asking about previous projects shows that you care about their needs and builds trust with your client. Furthermore, t shows your passion for the client's vision and that you want to align with what they are trying to achieve.
The extra intel is just a bonus to your friendly, conscientious outreach.
Send a Rough Estimate
Now that you've walked your client through the sales process and have a rough idea of what their budget will be, it's time to come up with an estimate for the project. By this point, you're either interested in moving the project forward or realizing that your visions aren't aligning.
But first, here's why you shouldn't give your prices out over the phone...
When talking about the project budget, it'll be natural for your client to ask what your price quotes are. And it makes sense for them to, you've just asked them about their budget so they'll be naturally curious about what you're asking price will be.
While it's not a bad thing if you tell the client your prices over the phone, you'll have a clearer idea of your prices after you take some time to consider the full scope of the project.
Instead, let the client know that you'll need to explore the project scope further and that you'll respond back to them by the end of the day. By doing so, you'll take a fairer approach to how much these services are worth, rather than undervaluing yourself in fear of the client pushing back.
So how should you deliver your price quotes?
After your initial budget meeting, you can follow up with an email that outlines your rates. Use this as an opportunity to decide if the project is worth your while. A speedy follow-up email after the meeting will showcase your diligence and professionalism.
You can send an email saying: "Thank you for the meeting; it was great getting to know the team." Followed by: "Taking your requirements into account….I will need x amount of hours amounting to X." This clearly lets the client know your expectations to satisfy their project scope.
Sending a rough estimate will open the door to budget discussions and give you a ballpark of which project ideas to pitch going forward.
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Try a Mini-Proposal
Mini proposals are a great way to help you win if you're in a project bid with other freelancers. It shows you have spent time thinking of the best options and solutions without devoting too much of your resources to a potential client.
More importantly, mini proposals will make you stand out from competitors by being informative, considerate of their needs, and by looking professional.
A mini proposal will give your client a preview of your capabilities, so, your work is sure to stand out amongst the others who are pitching on the same project.
You can use an online template to help you nail the project quickly. With the assistance of proper templates, you can produce a mini proposal to prove to the client that you and your rates are the right fit for the job.
What Should You Do if a Client Resists Revealing Their Budget?
If you happen to have a client who refuses to talk about their budget, this can be a big red flag. How can you know about the scope of the project if you don't know anything about their budget? This would be a good time to chat about how, without a clear budget, you won't be able to create appropriate solutions for their project requirements.
But even after explaining this situation, what if the client still won't budge?
A lack of transparency in your client can speak to how the working relationship will look going forward.
You don't want a client who extends the scope of a project without raising the scope of their budget. However, by feeling out the conversation, you can recognize if they're simply shy about the subject or if they're trying to hide from it.
If you still can't break through to them, consider cutting your losses and heading on to the next job.
Turn the Client Down if You Have To
Ultimately, only you can decide if the offer is one that you need to accept, especially if you're desperate for that next paycheck. If you don't have any other clients lined up, you can try finding some adjustments you can both make to meet in the middle.
Clients will appreciate it if they see you're willing to work with them. However, there will be times when you'll have to turn the client down to be fair to yourself.
Turning clients down isn't always easy, but working with a client is a two-way street, and budget negotiations help to lay the foundation of your working relationship. Consider your time in a situation like this. You want to let them down gently since we can't predict all of the reasons why they can't fulfill your price quote.
Here are some ways you can turn down a client:
- Be Prompt: Respond back as soon as you know this business relationship won't work out.
- Be Concise: You don't need to over-explain yourself, but let them know that this project won't be the right fit for you.
- Be Polite: Being concise doesn't mean you shouldn't still be polite. No matter how you're client behaves, being polite reveals good character and professionalism. And, you never know, your politeness might stick with them and they refer you to one of their colleagues.
- Offer a Different Option: If you're unsure about turning a client down but feel the payment doesn't accurately reflect the project scope, you can offer a different option. Find some quick projects that can elevate their business. Smaller projects might help align with their budget while meeting your financial needs.
Whenever a client resists revealing their budget or wants to shorthand your price quote, it might be due to a lack of trust. By offering different options, they can see first-hand the kind of work you can deliver for their business and might be more willing to satisfy your original price quotes.
But in general, budget transparency should not be an issue for your client, and if it is, think twice before getting involved in a project that might harm your brand. It's better to know up front than to create a stain on your brand by walking away midway through a project. By asking the right questions, you can determine if you're ready to move forward or move on.
Protect your reputation by knowing what you are getting into.
Talk About Money Early
It's best to get the money talk out of the way so you can get back to focusing on the project at hand. By taking the time to ask upfront, you won't have to waste time creating a proposal that the client might turn down.
When you set the standards early on, you can uphold client expectations to create a successful outcome both parties can be happy about.
Asking your client the big "budget question" doesn't have to be complicated. However, freelancers have mentioned that talking about money and budgets is one of their most burdensome conversations. Budget discussions often set the tone for the rest of the project. And as a freelancer or small business owner, it is your responsibility to include budget-orientated strategies in your meetings.
Whether your client is transparent or not, using the above tactics will help you determine if you should further explore the pitch. So the sooner you dive into the budget talk, the quicker you can decide if they're the right client.
Managing your time as a freelancer or small business owner is vital for financial growth. There's no need to doubt your rates. Keep the figures at the top of your mind and craft the proposal according to both parties' needs. And to help you out, you can use a template to streamline the process.
There are tools to help you succeed, so feel free to use them. They can assist you in every step of the process. Sign up to Indy, and we will help you manage your time efficiently and conveniently—all on one platform.