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5 Ways to Finesse New Project Budget Discussions

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Do you find it challenging to engage in budget discussions for new projects -- especially during initial client meetings when it can be easy to make promises that might be difficult to keep? If so, this article explores five ways to help you gracefully avoid backing yourself into a corner.

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It All Begins Innocently Enough...
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Imagine that you're meeting with prospective clients for the first time. You're excited about the prospect 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 exceed their expectations. With delight, you describe your ideas to your clients, who appear thrilled with your concept and can't wait to get started.

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But Moments Later, a Delicate Dance Begins...
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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.

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!"

And, voila! With just those fleeting, partially conscious thoughts, you succeed in backing yourself into a corner!

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Five Techniques for Reframing the "New Client" Scenario
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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 acquire 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 blog, at specially discounted prices. Note that these discounts apply only to certain services, and not necessarily to an entire project.

Benefits: After your new clients have seen a good starting sample of your work and have begun 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 it's really not clear how long an effort could take because there are too many unknowns, you can offer to produce a "test sample" 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, you could propose working to a not-to-exceed price (not necessarily at a discounted rate).

Benefits: This approach is especially useful when the client's content, terminology, technology, and/or other factors are new, dynamic, or otherwise difficult to gauge without further exposure to the material.

After discussing the finished sample with your client, you'd be able to gauge the requirements for the rest of the project with much more accuracy. Additionally, the client can assess whether your style is an ideal match for the project.

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, 10 hours per week).

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 ways of achieving the results. This communicates 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" version.

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 working budget is practically nonexistent, consider whether accepting a share of the results (such as a percentage of sales) would make sense. If you create this type of agreement with your client, you can design a written understanding that reflects this approach.

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.

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.

Article Source: http://www.articlemanual.com

Adele Sommers, Ph.D. is the creator of the award-winning "Straight Talk on Boosting Business Performance" success program, and specializes in helping people align their life passions with their business purpose. To learn more about her tools and resources and sign up for other free tips like these, visit her site at LearnShareProsper.com



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