How to Raise Your Rates

It’s National Global Entrepreneurship Week (which is really difficult to say, by the way), and we’re continuing a series on the indie spirit of authors, and how to start up and maintain a successful writing business. Yesterday, we talked about finding freelance work, and today we’ll talk about something that is often really hard for freelancers: raising rates. If you work with clients for a long time, chances are you’ll have to eventually raise your rates.

How to Raise Your Rates

If you keep clients long enough, eventually you will have to raise your rates with them. This is never easy but it also isn’t hard. It just needs to be done right to avoid losing your client. Here’s what to do.

Is Your Client Already Paying You Fairly?

Before you raise rates, take a good hard look at the work to determine if your client is really paying you fairly. If you need to raise rates because you don’t have enough other work, that’s not a good enough reason. If your client pays you what you should be paid, then a rate discussion isn’t important.

This brings up a good point about determining your ideal rate. You need to have an understanding about what your ideal rate per hour is. This will help you when taking on new work and figuring out when it’s time to boost your rate. Your ideal rate should cover your time, insurance costs, taxes, and expenses.

Justify the Rate Increase

Don’t apologize for raising rates, but know that you will have to justify the rate increase with the client. You can’t just say “I’m charging more” without a good reason, or your client may leave. Instead, give consideration to how much you need to make and what kind of increase is reasonable. When determining rate, look at:

  • How much time it takes you to write a post (letter, press release, or whatever piece you generally work on)
  • If you need to do research, determine the time it takes you to find sources and gather information
  • If you need pictures, factor in costs for you to buy pictures, find the right ones, credit them, etc.
  • If you need to promote your writing, factor in costs for social networking and marketing.
  • Factor in your costs for taxes and insurance.

If you do all this and come to the conclusion that your client is not paying you correctly, you now know what the new rates should be.

Approach Your Client

Before you approach your client about the rate increase, practice justifying it out loud a few times. I’ve found that the best way to do this is either on the phone or in person. Of course, a lot of this depends on your client. If you have one that prefers only email or text communication, you’ll have to do it that way.

Arm yourself with the knowledge of what the rate is now, why you’re raising it, and what it will be going forward. When you decide to raise rates you aren’t asking a client’s permission to do it, so be prepared if they balk or say no. No one wants to volunteer to have their rates raised, so it’s natural to get some pushback. Allow the client some time to “sit” with this information, but don’t back down or apologize.

When you make the decision to raise rates, you are doing it because you want to keep the client and your costs need to justify doing that. Don’t sound timid or embarrassed about having to raise your rates. If you need to do it, do! It’s for your business.

Image: scottchan / FreeDigitalPhotos.net

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