You run across an old friend.  Or perhaps make a new one.  They ask you about what work you’re doing now.  And you say, “XYZ.”

Your old/new friend goes on to describe their dilemma and the fact that they actually happen to have a great need for your “XYZ” service.  So the two of you decide to schedule a time to get together for coffee to talk about how you can collaborate.  You go home happy that you’re just a cup of joe away from sealing another deal and making a couple bucks, all the while getting to help an old/new friend.

As time leads up to the meeting, you quickly jot down a couple of ideas and points that you really want to hit before the deed is done.  Things like overall cost, timeline, and other details.  You might even go so far as to search Google, Twitter, Facebook, and Linked In for your old/new friend.  You make a mental note of any sort of news or related data that would be useful.  And you grab your keys and wallet and head out the door.

The meeting couldn’t have gone better; you talked to them about how you could benefit them, and they expressed a lot of interest in having your help.  They give you an outline of what they’re looking for and ask you that dreaded question, “So, how much will that cost?”

Think before you answer.  You have approximately 17 milliseconds to decide the fate of you and your old/new friend’s new business (and personal) relationship.  The next words to come out of your mouth may very well be what dictates the coming weeks and months of your business with this person.  The road leading you to this fork was inevitible.  However, you are now forced to make a decision.  It will play out one of two ways:

Pathway 1: Your old/new friend has just asked you how much it will cost for you to provide them with “XYZ.”  The friend side of you is trying to justify doing it for cheap.  You don’t want to scare them, offend them, or confuse them.  You certainly don’t want to say something that may cause them to never talk to you again.  And your professional side is vying for your attention, all the while screaming, “Full and normal cost structure!  Charge them what it’s worth!”  You weigh the two against each other and come out somewhere in the middle.

You’ve decided that you will respond to your old/new friend and tell them it will cost $XXX.  The look on their face implies satisfaction mixed with a hint of surprise (that it’s so cheap).  You both shake hands and part ways, happy that you’ve left the meeting at an agreement.

The outcome:  You were forced to give a response.  This is typical of an asked question.  You chose to give a response that had a figure attached to it.  Not good. By breaking under the pressure of a required response, you sold yourself short and gave them an unnecessary discount simply because you felt rushed.  You probably felt that if you told them you couldn’t quote them right then and there that you might lose the sale.  The fact that you’re sitting with them and they’re your old/new friend should tell you that they aren’t going anywhere.  If you would have gone with Pathway 2 it would have shown them another level of professionalism and efficiency.

Pathway 2:  Your old/new friend has just dropped the “How Much?” bomb on you and this is just your first meeting to discuss the simple possibility of even taking on the project.  You were certainly not prepared to actually tell them how much it would cost; you did, however, come to the meeting knowing what ballpark you would charge them, assuming the project fell within the guidelines that you had previously deduced from talking and researching.

If you’ve chosen this pathway, you won’t even attempt to run the numbers in your head.  Instead, you let them know that there is a bit more criteria that you’ll need to gather from them and that you’ll then be able to let them know your quote.  Tell them, “Right now is just too soon to affix a cost.  I need to know a little more about your project and needs to be able to accurately and confidently quote it.” This shows them that you’re serious and interested.  It also shows them that you don’t run headfirst into anything before analyzing the costs, risks, and benefits of a project.

The outcome: After you’ve responded and they’ve shown their understanding, you set up another meeting, either over the phone or in person.  This meeting is specifically to nail down the fine details that will dictate your price.  Then, after you’ve left the meeting and had time to evaluate your notes and estimate your time, money, energy, materials, and other costs, you will give them an official proposal.  This proposal outlines everything from the overall project, how to accomplish the clients goals, a real and actual cost, and an associated timeline.  This is something real and concrete that they can refer back to.

Time goes by and you’ve made it halfway through the project.  You realize that it’s taking longer to accomplish or more of your resources.  Looking back at the proposal (that you both signed), you recall the part that says the overall cost may be affected by unforeseen expenses, needs, and such.  You contact the old/new friend and explain the situation and they pay you accordingly.  The job is soon finished and all parties are happy with the outcome.

If, instead, you were to go with Pathway 1 and just a handshake (you’re old/new friends after all, right?), you end up putting in double the hours you’d originally anticipated and can’t go to the old/new friend and ask them for more money because there was no original agreement in writing.  With nothing to refer back to, you can’t alter the original cost, timeline, or terms.  You’ve effectively shot yourself in the foot.  Good job.

Try using both.  A proposal and a handshake.  We’re real people doing real business, after all.

How do you communicate and interact with clients both old and new?  Is it down and dirty or professional and efficient?  Or a mix of both?

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