Dr. McLaughlin, contractors don‘t find themselves in this situation too often but I‘ve managed to snag two contracts and now I must choose between them.
I don‘t really mind which one I take. They are about equidistant from where I live. The rates for the two contracts are similar at £420 and £425 a day.
What I would like is some advice on leveraging this to maximise my rate.
Any advice Dr. McLaughlin?
Dr. McLaughlin‘s IT Surgery
Yes, that‘s a great situation that you are in.
You quite correctly state that it is not a situation that contractors find themselves in too often because agencies want to ‘close the deal‘ and tell contractors that the client needs an answer by close of business that day.
That is seldom true.
If a client chooses a particular person to get the job they would not be happy taking the second best. They would be likely to wait a few days for the best person.
What you can do is to tell each of the agencies that you have had a better offer in cash terms for the other contract. Say that you are of a mind to take it.
There‘s no need to potentially burn your bridges by saying you are definitely taking the other job because it is more money (although that would work too).
I reckon you should be able to get £450 a day out of this situation.
I would be careful, though, about bidding them up against each other.
Contract Rate Target
I would set a target in the beginning, say £450. Tell the agency that” if you get me that rate I‘ll definitely take it”.
You‘ll find that the client may want to pay just a little more to snag the person who he or she considered to be the best person for the job.
The agent will try his or her best to get it all from the client. However, if there is a gap the agency has some margin to play with too.
Dealing with Agencies
There‘s nothing to lose for you here when you’ve been offered two contracts.
You haven‘t said you won‘t take the job. You’re just saying that the other agency offered you more and you are more likely to take that.
Of course, your big ‘problem‘ will be what you would do if they both came back and offered you the £450 that you wanted.
You have, after all, given your word to both agencies that you would take the £450 if they got it for you. So you may feel that you have to take the job from the first agency that gets back to you with that amount.
Deals from Two Agencies
What you could do, though, is not take calls from the two agencies.
One would hope that you have given them your email address so that they can get this offer over to you as quickly as possible.
Once you get it you can go back to the other agency and say that agency 1 has got you the £450 you wanted and you are going to take that.
Nice Commission Disappearing
This will send Agency 2 into a panic and a frenzy as they see the nice commission they would be getting totally disappearing.
They will say that they will contact the client and you‘ll tell them that you‘ll wait an hour before accepting the other offer.
They are likely to ask what you would take and agree to immediately.
It‘s up to you but I would go for something like £465.
The most likely scenario is that the agency will not even contact the client but will calculate what they can afford to give you from the agency‘s margin.
They may even have to get their boss‘s permission.
However, a lower rate of margin on you, and therefore commission, is better than none at all.
They are likely to get back within 15 minutes rather than the hour with the offer if they are going to make one (which is highly likely. Agencies tend to take what they can get both on the high side and low side).
Two Contract Offers
Now you have an offer of both £450 and £465.
I don‘t think it is worthwhile going back to the agency who bid £450 to try and get some more.
You would probably have to verbally accept the other agency‘s offer verbally anyway of £465 – and they would be whizzing over the contract by courier that very day to ‘close the deal‘.
So, there you are.
You now have an offer of £465 a day when you had a best offer of £425 a day before.
This is £200 a week and £5000 or so over a 6-month contract.
Except for what you have to pay in tax, it is all free money, as none of it will go on your costs like your mortgage, living costs etc, as they are already taken care of.
Being offered two contracts is a great bonus that you should utilise well.
So, there you have it.
It‘s down to you!
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