[tdr]

First off:

1). any business will start to decline at some point, including you(rs). So cost cutting is a proven solution. You are not buying a business, you deliver a service

2). the whole point of hiring subcontractors is to reduce risk (in my opinion). You are an expert they want&get when they need, probably with some strict clauses.

3). agree that the request is pretty left-handed

Secondly, about negotiations:

Everybody likes to feel special or more exactly that they "won" something. Why not make them happy by giving them a 2-3% (negotiate) and ask for this a contact-commitment of minimum 20/30/50 hours/month. That way you also minimize your risk of looking for work.

If you do have too much work however, then you have the upper-hand in negotiations. Play it now!

[evanderkoogh]

I agree that businesses should always been looking at costs, but only in relation to the benefits. Just looking at costs and trying to reduce them is meaningless.

[tdr]

I also agree, but probably they know more about their business than I do.

At least they should

[kahawe]

> I agree that businesses should always been looking at costs, but only in relation to the benefits. Just looking at costs and trying to reduce them is meaningless.

I know exactly what you mean and this is a very engineer kind of view... the point is, no matter how great a trip to Rome would be if your body is bleeding out right now you need to go to the ER first. A business works much the same but their "blood" is not so much money but rather liquidity and if it is in danger than they WILL have to cut costs and even in places where it hurts or where great things are done because if they didn't, they would be shut down from the outside. So just looking at costs might be vital, or it might just be some higher up trying to get a bonus. Also, liquidity on its own doesn't tell you that much about the state of a business.

[evanderkoogh]

You are right. I was slightly oversimplifying it. Liquidity can be a problem, but that was not likely to be the case here.

[tferris]

Great post and that's the usual counter-attack: use this situation as an opportunity to improve your business relationship—the other party wants something, great, so counter and ask what you can get if you give him this. Easy as cream-pie

[Morg]

Decreasing rate is financial suicide imho, once you've done it there's no reason to stop.

My point of view is I'm offering great value and if they don't want it, someone else does and I couldn't care less.

In the worst case, I'll take the opportunity to go get a better rate elsewhere.

On the other hand, I don't have a very high rate yet and it's much too easy for me to find another job to be really worried.

As you said, I believe far more in having too much work than in reducing your rates (I currently have enough paid work for at least 8 billable days ).