Common Mistakes: 4 Tips for Talking Budget with Your Clients


(Piggy bank image via Alan Cleaver)

We are in the entertaining industry, and even though our wonderful job is to create lifetime memories for our clients, establishing a cost for these memories, is always a budget dance.

This is what I have learned about clients and budgets:

When they have a budget in mind…

  • Good news: This is great, and you CAN design with a budget in mind. (Good luck. I always find this to be a huge challenge. My designs dreams are way too big, but I am learning.)
  • Bad news: Normally their expectations are much more than their budget. (They want it all…within their budget restrictions.)
  • Solution: Be very clear about explaining what things cost. Always have many options (and lots and lots of patience).

When they say they do not have a budget in mind…

  • Good news: If you show them a design they like, they’ll probably buy it.
  • Bad news: Most clients ALWAYS have a budget in mind. Even if they say they don’t. (Like all of us, every time we buy something we have an idea about how much we want to spend.)
  • Solution: I used to played a fun game to get the real information. I would make up a ridiculously high figure and then they’d usually say, “Preston, are you out of your mind?!” Then, they would tell me how much they actually want to spend. (This information is very important. You never want to start designing without a figure from your client. It could become a waste of your time and energy.)

The clients looking for a bargain…

  • Good news: Oh wait, there is no good news.
  • Bad news: I am not the right person to give you advice in this area. Years ago, I gave my clients lots of bargains and almost went out of business because I couldn’t meet my profit margin. So, forgive me. I just don’t know how to run a successful business by giving bargains.
  • Solution: In these difficult economic times, if you find yourself giving lots of bargain prices please make sure you are making at least a 40% profit margin. (40 cents profit on every dollar you spend.)

They are some clients (or friends) entertaining for the first time ever, and need a complete education in cost. (Especially those friends who are used to getting your design services for free.)

  • Good news: If you explain in detail how much you are spending (material and time) and how much you are marking it up, most of the time they’ll understand you need to make a living and they’ll pay.
  • Bad news: Because they have never had a designer or florist, they simply cannot understand why things are so costly.
  • Solution: Give them a few options between low, medium and high, and they will be able to reach their comfort level.

In all my years in business I have never had a client say to me, “Preston, design anything you want. The sky is the limit and we’ll pay.” I cannot wait for that glorious day.

Most of my wealthy clients became rich because they knew how to get the best value for their money. So, even though I do not discuss the final cost with clients, talking budgets is a big part of keeping a client (and yourself) happy.

How do you handle a client who wants a bargain? Do you find it easy to design with a budget in mind? Do you find it difficult to charge your friends for your services? (After all, you do need to make a living.)