<p>If I read this right you had not seen what needed to be designed. If so, you need to look at it. Flyers can be relatively cheap and simple to complex and expensive. I would agree, with a flat rate – my guess is the company would like that since they know the total cost and it limits them, by the hour can be risky if you don’t know someone. After seeing what it will take, figure your costs, outlays, media, etc, plus the nature of the creative task (your real value added). If these guys go to a company that does flyers it will cost more than they want to pay, hence you. If you know what the flyer looks like you can call some companies that do this sort of work (from simple print shops to marketing firms) and get what it would cost to get it done (i.e., pose as a client). Then undercut them. It will depend on where you live (NYC versus Tuscaloosa) also.</p>
<p>As for negotiations. Most universities have negotiation classes, check the business school for example.</p>