This post is from the latest ebook in our Show Me the Money! series. This six-part series is a step-by-step, hands-on course to help you maximize profits and take your business to the next level. The series provides resources and examples to help you achieve a more lucrative and sustainable income. The series includes:
- Part One: Expenses
- Part Two: Rate Considerations and Research
- Part Three: Detailed Guide to Hourly Base Rates
- Part Four: Project/Value Pricing, Retainers and More
In the newly released Part Five we guide you through How and When to Raise Your Rates.
Ever get to December, start running your finances and wonder how-in-the-heck you could have worked so many hours for so little profit (or even a net loss)? Or perhaps you realize the last time you had a raise was… well you can’t remember ever getting a raise as a solo. Why is that? We do it to ourselves and usually right from the beginning of our independent career.
Time for a Raise?
One of the best indicators that it’s time to raise your rates is when you find yourself turning work away. Is your dance card always full? This means you’re providing high value and have earned the right to set your sights higher. You may lose a tiny client or two, but wouldn’t you like to do less work for more money?
Spend that extra time with family or friends!
Another telltale sign: when you quote your projects or state your fee, do clients immediately say yes? There should be at least a pause! Seriously, if clients are enthusiastic to get going immediately when you tell them your pricing, this is an indicator your fees are too low.
Often, consultants think raising rates will be more trouble than it’s worth, but consider this: an extra $5 an hour may not sound like much to you (or to your clients), but it can mean a $5,000 a year raise! This assumes you bill 20 hours a week (1,000 hours a year). Raising rates even more will pay even bigger dividends.
How to Raise Your Rates
There are three clear steps to raising your rates (also known as giving yourself a raise):
1. Take a realistic review of right now.
2. Determine your new rate.
3. Notify current clients and/or implement current rates with new clients.
With new clients, you won’t have to give notification; you’ll simply implement the new rate and move forward. For current clients there are three recommended ways to notify then and implement the new rate:
1. Calendar: End of Year
2. Fiscal: contract review or renewal
3. Fiscal: Business review (client and your own)
As you develop your skills, expertise and enhance your experience, it’s important to evaluate the rate at which you charge for your work product. If you’ve got a sense of working endlessly but still struggling to pay your bills or reach a level of profitability, it’s important to evaluate the rate at which you charge for your work product. In the traditional business environment, you’d at least get a cost-of-living adjustment if not a bonus or raise – as a company owner, be sure you’re offering that to your most valuable employee.
[box type=”info”]To get the entire Show Me The Money Series including Part Five: How and When to Raise Your rates join the Solo PR PRO Premium membership site . Premium members can download all of the ebooks and worksheets from the Member only Learning Center. [/box]
Photo courtesy of FreeDigitalPhotos.net | Stuart Miles