Is it me, or is it seemingly getting harder and harder to justify your fees to prospective clients?
I saw a potential client last week. She made it clear she was seeing other people before deciding who to take on- fair enough. I spent almost an hour at her office, going through her business; my back ground; why using a qualified bookkeeper (at a higher hourly /standard rate) out weighed a data processor or admin person who didn't necessarily understand the consequences of what they were putting into the system.
At the end she said she liked me, but 'could we talk rates'. Yes, I said, and repeated my hourly rate (£17) which I'd already told her by phone when she'd initally called. 'Oh' she said, I was thinking £10 per hour max, as thats what an agency I spoke to had indicated. - Would I be prepared to drop to that? - Business was tight, all cash out needed to be watched, etc, etc. I explained that this was my business, and I could not therefore justify charging at that level for my services, especially as she wanted me on site, thus involving traveling time as well.
Thanks she said; I'll be in touch.
Needless to say I didn't hear back. I've since discovered that she's taken on a young girl with little in the way of either accounts or even business experience. She has decided she will be 'training' her herself to do the accounts
Perhaps I'll hear back from her after her year end, when the accountant charges an arm and a leg to sort it all out....
-- Edited by LizB on Tuesday 6th of March 2012 12:28:09 PM
It really is annoying when people think they can hire anybody to do bookkeeping as they see it as just data entry, it takes experience and knowledge to be able to produce accounts ready for the accountants to produce year end from.
So, the client went to an agent first then came to you. I personally don't think that you are being told the whole story (bet she missed off agents fee's, paid holiday entitlement for temp workers, etc.). She probably thought that she could cut out all of the peripheral costs by going direct but missed that people running their own businesses are seldom the one's doing temp work.
I think that the words "Opportunity Cost" are lost on clients (for anyone reading this new to bookkeeping thats if your working for this client for £10 per hour you are effectively stopping yourself working for someone else for £17 per hour so taking the position is costing you £7 per hour. All gets very complex with perfect markets etc. but I think that you get the gist).
I've had one myself today who thought that my advertised rates were a starting point. (imagine how I laughed!).
Personally the only negotiation that I do is for fixed price contracts where I always make sure that I'm going to come out better off than my hourly rate and the client is going to be left thinking that they are better off than if they had opted for my hourly rate.
Anyway, good call methinks on holding your ground Liz. I'll keep my fingers crossed for you that you get another come along tomorrow to fill the gap that wouldn't have been there had you taken the role.
All the best,
Shaun.
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Shaun
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