So how do you get a contract renewal at good rates and whom should you ask for one?
The first question, ‘whom‘, depends on how good you are at negotiating.
If you ware hopeless and don‘t like to ask for more money then leave it to your agent.
He or she couldn‘t do any worse than you would if you don‘t like to ask for more money.
Also, those not sure if they will be renewed might want to ask their agent to ask for them.
Approach the Client
However, in most circumstances it is much better that you approach the client yourself.
You never know what an agent‘s agenda is.
If the agency get all of the client‘s contractors for them then they may want to replace you with someone who gets them a better margin from the client.
Falling Daily Rates?
There‘s also another factor.
We saw last year that while contractor rates were falling, agency after agency came to the stock market to say that their margins rose.
Is it possible that some agents were getting renewal rises for contractors from clients and not passing them on?
Own the Customer
It is well known in businesses that whoever owns the customer owns the business.
Moreover, it is best not to have an intermediary between you and the client.
It also gives you a better chance of getting renewed by the client if you approach the decision maker at the client yourself.
If the client is looking to cut down on his or her contractors it is a lot easier to tell the agent over the phone that he or she is not renewing you than to tell you to your face.
The best way of all is to arrange to take the client out for a meal at somewhere fancy.
That‘s what your agent does so it must work.
When to Ask for Rate Rise
Do it maybe half way through your 3 month contract or with six weeks to go of a longer one.
Rather than say it is so you can ask for a renewal say it is to ascertain how you are doing and that it is standard practice in business to take a client out..
Tell him or her that it is tax deductible if there is any remaining suspicion.
They‘ll understand that.
How to Ask for Rate Rise
So, the next question is how you should do ask for a contract renewal rate rise. Here are previous articles we wrote on the subject.
Then the conclusion…
If you know anyone else who would find this article useful, please share it with them using the social media buttons at the top and bottom of the page.
Ad – Contractor Services
If you do need an umbrella company you could try one of the following:-
Or would you prefer to get expert advice about which umbrella company is right for your specific needs? If so fill in the form below and they will be in touch.
For Mortgages specially designed for contractors try Specialist Contractor Mortgages.
For all necessary business insurance, including IR35, try Business Insurance for Contractors