Why you should raise your rates
For what are essentially business owners and entrepreneurs, freelancers are surprisingly shy when it comes to talking about money. For many of us, we’ve decided to go freelance because we feel we’re really good at something, and want to retain creative control over our work, and have a little more freedom in our lives. In most cases, we just want to get on with the job at hand, not grapple with spreadsheets, haggle over quotes and worry about if our rates are putting off clients, and so we’d rather not think about it.
However, considering most people expect businesses to be essentially profit-seeking, to a greater or lesser degree, our shyness could be costing us big time. Even if you’ve put a lot of thought into your pricing structure, chances are, your fees are too low. There will always be someone out there willing to do your job for less – this doesn’t mean you need to take them into account when deciding on your own rates. Most likely someone will be charging more than you, too.
Don’t be deterred by fears of rejection based on ‘too high’ rates – higher fees are an indicator of quality. The reverse is also true, and should be taken seriously – if your rates are too low, what judgements will potential clients make about the quality of your work? Some people are only ever looking for cost savings, more than likely they aren’t so concerned about quality – are these the kinds of clients you want to work with? Other people’s budgets are their concerns – if they really need the work, and they want you to do it, they will budget accordingly. You need to put your needs, and those of your business, first.
You know what your time and skills are worth, so don’t be scared to ask for, and expect to receive it. If you aren’t being paid what you deserve, or even what you need, this could really kill your freelance dream, as dropping out of the rat race will bring you no joy if you’re swapping the stresses of a demanding employer for a demanding bank manager! It also won’t do your mental health any good – your health and happiness should always be a priority!
When was the last time you reviewed your rates? If you were in regular employment you could expect regular salary reviews as you progressed and became more highly trained and qualified, and in line with rises in cost of living. All of these factors are just as relevant to freelancers. The financial environment changes rapidly, and, more importantly, you’re changing, too – every project you work on is more experience under your belt and more expertise that you can, and should, be charging for. If your prices are the same now as they were five years ago, even one year ago, without doubt you are underselling yourself. You won’t see Alan Sugar under-quoting, so why should you?
So how can you tell your clients that you are rising your rates? Here is an example email that you could send to your clients.
I do hope that you are well. I am emailing to inform you in an upcoming change to my rates.
As a freelancer it is an important part of my long-term plan and career progression that I periodically review my rates to ensure that they remain in line with industry standards, and reflect my ongoing professional development, as my experience and expertise grows. Unfortunately, as I’m sure you yourself are only too aware, cost of living tends to rise year on year, and inflation must also be taken into account.
As such, my rates for the year 2016 will be the following: £**.** Per hour.
I hope that you can appreciate that this increase is one that I feel is fair and necessary, and hopefully that you will feel is deserved. Whilst undoubtedly you will be aware of other professionals providing my services at a lower rate, I hope that you can recognise that under-selling is not a sustainable business plan for a freelance individual, and so understand my decision not to compete with these people on price. I hope also that you will feel that the quality of my work warrants the price quoted above, and of course I will continue to put 100% into all of my projects, as I have done up until now.
I am committed to always providing excellent value for money; if you have any concerns at all, or would like to discuss the proposed changes in any way, please do not hesitate to contact me – as ever, your views, and your custom, are extremely important to me, and I welcome an open dialogue.
It’s time to give your finances a health check and start charging what you’re worth!