Increase your day rate with our top tips
Your take home pay is (probably) a big part of your career as a Limited Company contractor, so it’s only natural to consider whether you’re getting the day rate you deserve for your skill set and experience.
In this blog we share with you the top four ways to negotiate the day rate you deserve and give you essential advice on how you can continue to steadily increase your take home pay as you progress through your career as a Limited Company contractor.
1. If people aren’t buying, then you shouldn’t be selling
Start by taking a look around your industry – who’s looking to hire people in a similar field to you and how much are they willing to pay? What skills are they demanding and if possible, are you able to see how many other people have applied for the same position?
Job boards, agencies and talking to similar contractors can give you a great insight into how healthy the hiring market is, at the point at which you decide to aim higher. If a previous client is requesting your services but is questioning your higher rates, ensure you are able to quote reference points throughout your industry research to demonstrate how you can justify your increase.
2. Test the waters with an agency
One of the most popular methods used to find contracts is through agencies, so why not speak to them first to see what the marketplace is like? They spend more time looking at day rates and how much clients are willing to pay, so liaise with them first.
Ask them if your day rate is on par with those similar to you and whether there are any clients who tend to value the level of contractor’s experience based on the day rate they charge. You could be missing out purely by charging too little!
If your agency acts on your behalf they will be able to negotiate with the client that you’re the right contractor for the job, rather than the day rate being right for you as an individual. They can also act as a buffer between you and the client, so should they react in a negative way then your professional working relationship is not directly affected.
3. Timing is everything
Are you half way through a contract and realising you’re charging too little? Unfortunately to remain professional there’s very little you can do when it comes to to negotiating a higher rate mid-way through something you’ve already agreed to.
However, should your contract’s conditions change or it’s extended, then this is when you’re able to consider introducing a higher daily rate. Any changes in your contract are an open invitation to negotiation on both sides, so use this to your advantage.
4. Show passion for what you do
For some clients it’s not just about whether you can complete the contract on time and to specification. Sometimes they’re looking for more and that’s why it’s equally as important to showcase your passions for contracting as well as their industry as a whole.
Show the client how much you enjoy contracting, what part of their contract excites you and your enthusiasm for their project. You can’t fake passion and clients knows this, so if you genuinely have a real connection with a certain contract or client then ensure you get this across.
It will also make negotiation for a higher rate much easier, as the client will know you’re the specific contractor they want and will be willing to pay.
Negotiation is key
So there you have it, our top four tips for getting the day rate you deserve. For many clients, dealing with a contractor that is low maintenance, highly skilled, that can easily form team relationships and understands they are replaceable is a rarity – so use this knowledge to your advantage when pitching for business.
Maintain your professional dignity, integrity and reputation and you’ll find it much easier to request an increase in remuneration.
Like this type of advice? Our resources section has lots of free blogs and guides, to help you on your way to contracting success. Alternatively you can speak to one of our team of expert advisers. We look forward to joining you on your journey to Limited Company contracting success!
This blog has been prepared by Intouch Accounting. While we have made every attempt to ensure that the information contained in this blog has been obtained from reliable sources, Intouch is not responsible for any errors or omissions, or for the results obtained from the use of this information. This blog should not be used as a substitute for consultation with professional accounting advisers. If you have any specific queries, please contact Intouch Accounting.