How to Raise Your Prices as a Freelancer
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Please welcome back our usual Tuesday contributor, Cat from Budget Blonde.
Speaking from experience, I can say that there are many challenges to working as a freelancer. You have to learn how manage your time, be your own boss, meet your deadlines, and become a pro at networking and prospecting. One of the less often discussed but equally difficult aspects of freelancing is setting your rates. In my opinion, it’s one of the more challenging aspects of the job. Once you set rates that you’re happy with, you’ll eventually have to revisit them and consider raising them, especially as you gain experience worthy of a higher rate.
If you are a freelancer and want to know how to increase your prices so that you can take your business to the next level or quit your day job, here some some of my top tips based on over two years of being a freelance writer.
1. Start With Your Current Clients
It’s easy for me to suggest that you raise your prices for all new clients. That’s pretty simple. You just go into your rate sheet or your marketing kit or however you show your prices and increase them slightly. If you have to justify it or if your new client heard your rates were different, you can explain that you recently increased your prices to reflect a new service, skill, or because you are in high demand – whatever your reasoning is.
What’s even more difficult is raising rates with current clients. They are, after all, used to working with you at a certain rate. At the same time, it’s the smartest way to increase your current income because you start with contracts you already have as opposed to hustling for new ones.
Like any 9-5 job, asking for a raise outright probably won’t get you anywhere unless you deserve it. I would recommend working with a client for several months to a year before asking for a raise. You don’t want to inquire about it after just working with them for a few weeks!
2. Know Your Worth
Everyone says, “know your worth” but it’s just a bunch of mumbo jumbo until you sit down and really think about it. Knowing your worth means understanding that you are more valuable than an hourly rate. You have to think of the projection and the impact of the job you do, not the time you sit in your pjs actually doing it.
For example, if you want to raise your prices for a certain client after working with them for six months, it’s not very effective to say, “I’d like you to consider my new price because I’ve been working for you for quite some time now, and as you know, I’m very reliable.”
That really won’t impress them. After all, there are lots of reliable freelancers who would be happy to take your job right out from under you by offering a lower rate, so you really have to identify what makes you unique.
What do you bring to the table that no other freelancer does? What happens when you hand in your work to your client? Does your work translate into something bigger, like increased company revenue or significant exposure for your client?
3. Find Your Confidence as a Freelancer
If you don’t know the answers to the above questions or you think that you’re not “good enough” to find answers to them, then it’s time to increase your confidence-o-meter, my friend.
I have lost count of the sheer amount of people who ask me about becoming a freelance writer and yet make excuses about how “no one will want to read what they have to say” or how they “aren’t an expert in the field.” Seriously, people, is there a finance degree hanging on my wall? Nope. Yet that doesn’t stop me from writing about what interests me and my own personal story – and making a living from it. I don’t say that to act fancy; I say it because if I can do it, anyone can do it. If you have a passion for something, you should do everything you can to make it happen.
To sum it up: You have to increase your confidence if you are going to increase your prices. You also should keep track of everything positive you contribute to a client so when it does come time to raise prices, you can refer to a list of your contributions to help make their decision a little easier. (Editor’s note: I could not agree more with Cat on this. We’ve seen this in our own business – clients want results and if you can point to solid results then it gives more weight to your argument of wanting to increase your rates.)
Are you a freelancer or are you someone who is looking to grow a side business? What process did you go through when you set your rates? How do you feel about the idea of raising your rates with current clients?