Whenever talking to an experienced freelancer about income, you are told you should regularly raise your rates. You start to offer more and your expertise grows.
But, is it actually time to raise your freelancing rates? And how should you do it? These are questions that are not so easy to answer. Fortunately, as businesses make fewer outsourcing mistakes and they start to understand the importance of remote work, new opportunities appear. The freelancer is no longer forced to stick to the same rates for a long time as they cannot get better deals. However, when should you raise rates? Let’s mention some clear signs it is time.
When New Offerings Or Skills Are Added
Did you take development classes? Did you finish a course teaching you to design better websites? Are you now offering content strategy services besides content writing services? All of these are signs that it might be time to raise your freelancing rates.
Upleveling skill sets and brand new offerings automatically dictate it is time to talk to current clients and do some upselling. Also, you have to raise rates for the extra freelancing clients you get.
Since you have new skills or offerings, you can also repackage services. They can be repackaged into something new in the form of new offerings or you can adjust the pricing model. When you repackage services, you show you sell additional value. In some cases, this means you move from the hourly rate to the project-based payment. In other cases, you move towards higher rates and you increase your charged up-front payment.
When Life Costs Go Up
One of the biggest mistakes freelancers make is that they do not change their rates for really long periods of time, usually years. As time passes though, the cost of living also goes up. This is a sign it is time to raise freelancing rates. How much you can earn as a freelancer is directly connected to day-to-day living costs.
Inflation is one of the reasons why you should charge more. For instance, in July 2022, inflation in the US hit 9.1%, which was a 40-year high. That was a perfect time to charge more. Inflation affects both individuals and businesses. You end up paying more just to live. This means you should be paid more.
When You Have More Experience
Another mistake freelancers make is that they do not take into account the effect passing time has on experience. Simply put, the more you work, the higher your experience. As a result, rates have to gradually increase.
The easier and most effective way in which you can raise freelancing rates is by scheduling this at specific intervals. Then, you just have to stick to the schedule you set. Obviously, this also means you have to let clients know that rates will be raised yearly, or how you set it up. Such information can be written into the contract you sign so that there are no discussions in the future.
When You Get Zero Pushback From Your Clients
This is a rarely discussed situation but one in which you absolutely have to raise your rates. Keep in mind the fact that companies save a lot when they use remote work. This is because they avoid things like taxes, healthcare, and computer overheads. When you discuss project rates with new clients and they quickly accept rates without questioning, there is a pretty good possibility you are undercharging. Basically, you provide more value than what you ask for.
When you plan your pay increase or draft a new proposal, think about how quickly your new clients accept your rates. Pushbacks show you charge close to what you actually deserve.
Tips On Raising Freelance Rates
Now that we discussed when you should increase your freelance rates, we have to talk about how to actually do it. Most freelancers have problems with this, especially in the first years of doing work because they are afraid they will lose clients or great opportunities. Freelancers need to know many things, including raising rates. Fortunately, you just have to be prepared. The following tips will help you raise rates without too much of a hassle:
- Clearly communicate raises with clients – The communication between you and your client needs to be clear and concise. You need to simply let the client know why the rate is going up so that you put a focus on the provided value. You have to plug the new services, the growing experience you have, and even the relationship that is already established. Basically, you have to negotiate the higher rates.
- Offer plenty of notice – Obviously, it is a very bad idea to say you want a pay raise starting next month, all without any prior notice. There is a much higher possibility the reply will be positive when you let the client know it will happen and you do it way in advance. Ideally, the heads up should be of at least two months. By offering notice, the client has the time needed to rethink the budget and accommodate the increase. At the very least, if the client cannot accommodate your new rates, you can look for other clients.
- Draft the contract with rate increases in it – This works for deals with your future clients. When you draft the contract, add a rate increase to it. You can thus bypass many client conflicts since the party you discuss the work with only becomes a client after agreeing to the increase. The trick is to clearly name intervals when the rate increases and how much they will increase, like a flat rate or a percentage.
It is completely normal to feel anxiety when you want to charge more for the services you provide. However, this is a complete necessity. You have to treat your freelance work as what it actually is, a business. In business, you have to focus on growth. Increasing your rates is all about growth.
Keep in mind that with practice, getting paid more becomes much easier. You can even create email templates that you can use in the future. And if you often find yourself not taking active steps towards increasing how much you are paid, create reminders so you actually do it.