Raising rates is a frightening prospect for many freelancers. It’s reasonable to expect that any business will raise the cost of its products and services over time to account for inflation and other factors, yet the self-employed seem to find raising their rates an almost loathsome task.
Not only do you have to figure out how to introduce your rate increases to your existing clients in a positive way, you also have to have a strategy in place for those who try to bargain with you (or even flat out refuse).
With static prices, your business will never grow and you’ll be stuck earning the same money year after year, no matter how much your service has improved. You wouldn’t accept this in a salaried job and you shouldn’t as a freelancer either.
Luckily, for those of us that break out in a cold sweat at the idea of asking a client for a higher fee, there is another option. By thinking out of the box and reorganizing your way of working, it is possible to increase your rates by as much as 100% or more without your clients even knowing.
Set A Per-Project Rather Than Per-Hour Rate
One of the easiest ways to give yourself a pay rise is by changing your fee model to a per-project rate, rather than charging by the hour.
Many freelancers start off by charging an hourly rate as it often seems the easiest way to estimate prices. If you’re just starting out and find it difficult to estimate how much time a whole project will take you to complete, you may decide that logically, it makes the most sense to charge by the hour. If you’ve just made the move to freelancing from a salaried position, you may be tempted to work out your pay per hour when you were working for a company and aim for a similar rate in your new freelance business.
I advise against freelancers charging by the hour under almost any circumstances. By putting such a finite price on your time, you are severely limiting your earnings potential and setting yourself up for a battle every time you want to raise your rates.
When you are paid by the hour, there is no way to increase your earnings per job without working longer hours. This can make it tempting to work more slowly in order to earn more money, which is a sure fire way of ending up in your clients’ bad books.
However if you’re already working on an hourly basis with your current clients, there’s nothing to stop you from switching to a project-based fee model. Rather than increasing your hourly rates, simply set a price per task.
For example, you may publish a set price for:
- Designing a logo
- Creating a one-page flyer
- Building a basic website
- A two-hour photoshoot with a set of five prints
Whatever type of work you do, it’s likely that you’ll have some tasks (such as the examples above) that you can simply assign set prices to. For more complex projects, you’ll need to estimate the work involved and come up with a quote.
Work Smarter, Not Harder
By changing to a per-project pricing model, you’ll find it’s easy to increase your hourly rate simply by working as quickly and efficiently as you can. If a task normally takes you five hours and you can find a way to do it in three, it’s a no-brainer to realize that you’ll have increased your effective hourly rate, and at the same time, saved a couple of hours for working on something else or relaxing with your family and friends.
By moving away from the hourly pay model, you can forget the idea of working as many hours as humanly possible. This is an easy trap to fall into, especially for new freelancers who are worried that their new career may not pan out if they don’t work overtime for the first few months.
Before you know it you’re on your computer until the wee hours of the morning and family and social time have become a thing of the past. One of the huge advantages of working freelance is that it gives you more flexibility to take part in leisurely pursuits and spend time with your loved ones, so if you’ve ended up in this position, it’s probably time to re-think your business model.
If you can increase the speed at which you work while maintaining the quality, you’re on the right track. You’ll probably find that this comes naturally with practice but there are a few tips and tricks you can use to work more quickly, depending on your area of business.
First, look at the technology you are using and figure out ways that it can help you to save time. If you’re using an old slow computer, you’re throwing money down the drain. Investing in an up-to-date and fast machine is a sensible strategy for your business. Likewise, if there are software programs that can speed up your working process, buy them – you’ll find that they pay for themselves in no time at all.
You may also want to try timing yourself on certain tasks and trying to beat your previous time when working in the future. This can sometimes be difficult when you’re doing creative work, but it can really help to make sure you are focused on the task at hand.
Automate And Outsource Tasks
As well as streamlining your work processes, it makes sense to cut out the tasks that a software program can do for you or that you can pay someone else to do at a lower rate.
For example, rather than spending valuable work time creating invoices for all your individual clients each month, it makes a lot more sense to use invoicing software such as FreshBooks. Photographers and illustrators can speed up repetitive tasks by creating actions and macros to automate part of their work. Whatever kind of work you do, it’s likely that part of it can be automated with software.
If you are spending a lot of time on administrative tasks then you may want to consider outsourcing them so you can spend more time on your business. Many freelancers are put off the idea of outsourcing because they want to keep their outgoing expenses down but it actually makes a lot more financial sense to pay someone else to do lower-value tasks for you.
For example, let’s say you spend 10 hours per week dealing with client emails. If your rate (either as a published hourly rate or your average rate on a project basis) is $50 per hour and you can hire a virtual assistant for $20 per hour to field your emails, you’ll essentially be saving $300 per week (provided you use the time you save to work on your client projects).
Aim To Meet Client Expectations (Not Exceed Them)
There is a fine line between providing a good service and going overboard and it makes sense to not stray too far past the line. Your client will probably have an idea of the level of service they should expect based on the price they are paying and you shouldn’t over-provide for low-paying jobs.
Obviously you should always provide quality work and going above and beyond for your client from time to time can help to build customer loyalty. However, if you find you’re always spending more time doing free extras for a particular client, you may want to re-think your working relationship.
The same goes for clients who negotiate a lower fee. From time to time you may be willing to accept a contract for less than your published rate but you may want to reassess the scope of the work with this in mind. For example, if you normally charge $500 for a photo shoot that includes prints and digital files, you may offer a package for a lower price that doesn’t include prints and only includes watermarked digital images.
You’ll soon get the hang of working out your most valuable clients and these are the ones that you should focus the majority of your energy on. While lower paying clients have their place, you’ll be limiting your earnings potential if you spend more time doing work for them than is strictly necessary.
Exchange Higher Paying Clients For Your Lowest Paying Clients
Rotating in new clients is another painless way to increase your fees. While there are certainly many advantages to keeping regular clients, firing your lowest paying clients so you have time freed up to find some more valuable clients can be a very effective strategy.
The easiest way to do this is to continue working for your current clients while at the same time marketing your services and looking for new ones. When you find a new client who is willing to pay your higher rate, you will find it no problem telling your lowest-paying client that you have increased your fees. If they agree, you may be a little busier than usual until you can drop another client, which is a nice problem to have. If they refuse, you can end your working relationship peacefully with no regrets.
Start Charging What You’re Worth Today
There’s no reason why as a freelancer you should be working more hours than a regular 9-to-5 job or just barely scraping by on the money you earn. Take charge of your business and your life and start charging the fees you really deserve for your work today.
Have you tried any of these strategies to increase your freelance earnings? Do you have any other ideas? We’d love to hear your opinions in the comments.