Last week I had an offer for a job as a musician out of town. The costs for transport and hotel would eat up half the money they offered me. So I said, yes I do it, but what about these costs? They said, well ok this time they'd pay it but they bluntly told me that I will never get asked again.
How stupid is that?
I regularly travel to gigs and have a price list with a paragraph that says: Travel costs up to 20 km (one way) are included, every additional driven kilometer is EUR 0.40 plus VAT. I see no reason why I should sponsor a client by paying for car costs by myself. I have never, and I say never, done that since I work with a price list (with other words for 7 years now).
BTW as an artist I have so often benefitted from having a printed price list. I am not jumping back and forth from project to project and my flag is not turning with the wind. Instead of that I decided to have a list that is consistent in itself, and will consider to adjust prices once a year, not more often.
Actually I am having different lists that differ slightly in range and price depending on the target groups. But these groups are well defined. I have taken much care to work that out and have benefitted from it all the way since then.
In the case somebody thinks he/she needs a discount beyond that, he/she needs to present a good reason for that. For example a charity project, something for children or similar, or a bulk discount for bigger volumes. If so, a discount could be between 5 % and 10 % from the list price, no more.
Believe me, clients have a sense about how ready you are for compromising your price. The funny thing is that if you are perfectly ready to walk away from the deal if not being paid accordingly (and doing it from time to time) you have the least requests into that direction.
What do I do if the budget just isn't there? Easy answer, I just don't do it. If a person wants to have a Porsche and does not have the funds for it he can not buy it, no need for mercy in this case. I am not able to sponsor a client's wishful thinking.
However in certain fields I work with a building blocks system which includes a basic package that is in the same price range like market competition plus add-ons for more comfort and goodies. This way every client classifies himself in a way and also smaller deals are possible. However the price list is consistent in itself and no client is getting the same service for less money than others that have to pay for it expensively. This is a very important principle for me.
Of course all this applies to services and capacity in fields where I am already experienced. In the case of a new idea or service there will be a short finding phase where I test the market and look for reference projects, and that could include bigger discounts. However this phase is relatively short.
The key to being an artist in business is to look upon the own work and performance as commercial goods. From that moment on the same rules and calculations apply as with all other commercial goods.