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I generally agree, although whenever a rate is reduced for any reason, it should be stated out loud and in writing and on every invoice with a clear end date or specification for the reduction. Never let the special deal be forgotten as anything other than a special deal and after the deal is up, raise your rates back to normal without hesitation or apology.

Never reduce your rate. Always make it clear on the invoice what your rate is, and apply a clearly explained discount to the invoice. Discounts are temporary, rates are sticky.

Just offer to help them scope something you can do within their budget, and maybe it involves training them to do it themselves. Or just a better (simpler) design anyway with better milestones and focus on deliverable prototypes.

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