[kahawe]

> Sending out a mail to a bunch of your subcontractors asking them to agree to a cost reduction is not only silly, but it also shows you have no clue how to run a business.

It is a mildly smart and efficient way of demonstrating brute-force against your one-man-shows and small contractors of which too many will rather swallow the 5% cut than being afraid of not getting hired again... it is communicating "take it or leave it" and makes you worry about consequences. No, this is not nice but that is exactly how a lot of those big businesses are run and you wouldn't believe some of the stories I could tell you even about big names in IT. And it is not necessarily a sign of a huge decline, it could just be one of the higher-ups trying to earn brownie buttons or sweetening their own bonus by demonstrating some sort of cost reduction.

I don't think this blog post should go on to give suggestions how a business could cut costs elsewhere but it should demonstrate tactics of how you as the developer can respond to this, whether it comes from actual necessary cost reductions or just some management whim. There are a few good ones in the comments luckily! I liked the idea of the "counter-offer" where you offer them to work 5% or 10% less at the same rate.

When it comes down to it, it is just negotiation tactics and a lot of that comes down to not even going where they want you to go and having enough experience to direct things into the right direction much beforehand so you won't even get into these "yes or no" kind of moments.

Another idea is offering them an appropriate amount of "free" service if they order that-or-that many days with you - this might seem stupid at first but think about it, you could get a guarantee for days that you might not have had otherwise and MUCH MORE IMPORTANTLY: you did not lower your price!!! This is the one thing you should definitely avoid because re-negotiation prices up is very,very hard and probably impossible, so don't even go there. Place your high rates but offer "free" days where and when appropriate; that way your price is settled and you avoid further discussions on price and you can bill them at that rate later on.

[aerique]

No, this is not nice but that is exactly how a lot of those big businesses are run and you wouldn't believe some of the stories I could tell you even about big names in IT.

Would you mind sharing some of these stories here or on a blog?