Today’s episode focuses on how to raise your rates. Raising your rates is not about if you should raise them, but when and how. On episode 28 of Deliberate Freelancer, my guest Pam Capalad talked about the need to take the emotion out of raising your rates. I thought that was so smart—and easier said than done.
Pam recognized that a lot of issues tend to pop up when we talk about raising our rates: imposter syndrome, fear of rejection, wanting to be liked.
All of that is emotion. I wish I could help you instantly channel the confidence of a successful businessman who was born into privilege and never questions how much he charges his customers. But I can’t, so let’s talk about how to raise rates for your freelance business.
1. Start by eliminating your hourly rate. Start charging by the project. If you work fast, you are
penalized for charging an hourly rate. And, an hourly rate doesn’t recognize the value you’re bringing to a project.
2. Instead, create a secret hourly rate.
Aim to earn way more than your secret hourly rate. This is where project rates shine.
3. Don’t underestimate that nagging, resentful, frustrated feeling. Don’t agree to rates that you don’t feel good about! Take a beat every time you come up with a rate—right before you send the proposal off—and gauge your feelings on it. This is where it’s OK for emotion to come into play.
And if the potential client comes back to your proposal with a counter-offer, take another pause and make sure you are comfortable with the lower rate they are suggesting.
4. All clients are not created equal.
One mistake a lot of freelancers make in the beginning is having one rate for everyone. Don’t. You may have rates that are higher for corporations that have more money than what you charge a small nonprofit in your community. You may charge more for more technical projects or projects that are a pain in the butt or have challenging clients. There are a million reasons you might charge differently. Look at each client and each project on a case-by-case basis.
5. Raise your rates for all new clients. Create project rates based on your new secret hourly rate for all new clients.
6. Raise your rates for existing clients. Start by making a list of all your clients and how much you charge them. Go down the list—treating each client differently—and ask yourself how much you could raise the rate. Once you decide on the new rates, you need to email your clients and inform them of the new rates. Don’t ASK them if the new rate is OK. TELL them what your new rate is.
7. Track your time on specific projects.
Time-tracking specific types of projects you do often will give you a sense of how much time certain types of projects will take you. You might be surprised to learn you are underestimating or overestimating how long a project takes. Be sure to include your research, all that emailing back and forth, any phone conversations. It all adds up.
Biz Bite: Stop talking.
The Bookshelf: “Word by Word: The Secret Life of Dictionaries” by Kory Stamper
Episode #28 of Deliberate Freelancer: Take Charge of Your Finances, with Pamela Capalad
Episode #22 of Deliberate Freelancer: How to Create a Better Work-Life Balance, with Laura Poole
Episode #28 of Deliberate Freelancer: Spotting Red Flags and Scope Creep
Toggl time-tracking app