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I tend to use a weird approach.. Since I have so many different types of client with vastly different budgets I take a "as much money as I can reasonably get" stance.
Not weird at all. That's called working with your client. What ever the budget is, take the project, get the client.
I've always asked my clients big or small one straight question up front, "What's your budget"? They always tell me.
+1
If someone tells you all they have is $300 and you need that money and can deliver the project in 2-3 days, then take the job and get that client. Sure you should get about 2-3x that much but it's tough times right now in this economy and you have to get what you can sometimes. Now you need to get paid at least a couple of hundred dollars but you know what I'm saying.
I completely agree provided this doesn't become the normal way of getting work.
The problem is that there are more and more people willing to undercut each other just to get the business and that the market rate is going down all the time. I walk away from business where people don't have the budget to cover reasonable pay and equipment, and I did it again only yesterday. B&H never feels sorry for me when I want some new gear but don't have the budget to cover the price they are askingThe tax man certainly never feels sorry ....
If you have no work then undercutting the market can be a very valid way of getting in to the market, and in to 'new' clients, but perpetually undercutting where the price needs to be is simply a downward spiral. If you always meet your client's first budget offer, next time some of them will claim to have less budget than last time to see if they can push you down further and further. At some point you have to walk away because it's not worth it.
This video kinda sums it up....
http://www.youtube.com/watch?v=R2a8TRSgzZY&feature=player_embedded