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3 Things to do before you raise your freelance rate
Should you increase your rate as a freelancer? Absolutely! We've all been in that situation where we know we've underbid on a project and left money on the table. But it's not something you should do without understanding why you're doing it.
I've seen many freelancers in years past just make the change arbitrarily. Sometimes they price themselves out of their market. Other times, the increase wasn't enough to support new costs they took on in their practice. Here's a few critical considerations you should think through before you decide 2017 is a year of increasing rates.
Are you missing anything in your rate?
Your rate should cover what you want to earn in your practice as well as all the costs of supporting it to do your best work. If you're not covering those costs, then you're not charging what you should. Make sure you have this right before you communicate the increase to your clients.
I wrote a post about things many freelancers miss when calculating their rate.
Understand your value to your clients and communicate with them.
When you increase your rates, you're letting clients know you feel your value has changed. That it's increased. If you want to keep them as clients, you need to make sure they understand how that value is changing. Most of your clients will agree about the value you provide. For those who ask questions, thinking this through will help you prepare for those conversations.
You should also be giving your clients enough notice. It's reasonable to offer between 30 and 90 days notice depending on your client base and the average size of your sales. Part of having your clients support this change is not surprising them with the news!
Be prepared for a few rejections
Sometimes, it doesn't matter the value you're providing, a client just won't want to pay the extra you're charging. There's two ways you can handle this.
- You can offer to pre-book (and pre-pay!) work at the old rate for a period of time. When I did this with my clients the last time, I offered pre-booking for the next 90 days. The clients who took advantage of this saved a lot of money, and I knew I had work locked in while I made the transition.
- You can let the client go. But don't feel bad about this. The clients you do keep will more than make up for the lost income most of the time. Plus, you can use that freed time to do more sales at the higher rate.
If you haven't raised your rates before, this can be a really scary time in your practice. Thinking through these things will take some of that fear out of the process, and help you approach your rate in a healthy and productive (and profitable) way.
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