Unlike traditional employment, freelancing means no annual review with your boss, no Christmas bonus, and no chance of promotion. Instead, as a freelancer, you have to take matters into your own hands.
But working out when and how to increase your freelance rates can be amongst the hardest decisions you have to make as a freelancer. It means carefully balancing your need to win and retain business, with ensuring you’re commanding what you’re truly worth – and not working all hours to get it.
New clients vs. existing clients
It is naturally easier to increase your rates with new clients that come through the door, than amongst long-standing clients who are used to paying a certain amount. Many freelancers start off charging a lower rate to win those first bits of business and establish themselves in the market. But this means that you can be stuck with lower rates, even as your experience, quality of work and client-base increases. If you tend to work with clients on a long-term basis, this can end up limiting your earnings.
In contrast, if you have a higher turnover of projects, you have more opportunities to experiment with how you charge, as you’re regularly quoting for new projects. If you find that clients agree easily to what you suggest, then you can go a little higher for the next project and then a little higher still. You also have the opportunity to be bold with your rates when you’re already busy, and for projects that don’t interest you as much. In these cases, you may be surprised by what clients will say yes to!
Strategies to increase your rates
Whichever your situation, or if your client-base lies somewhere between the two, there are numerous approaches you can take to secure higher rates, and increase your earnings. Here are five of the most effective:
Increase the value you offer:
Just like when you work for a traditional employer, you can command higher earnings based on the level of insight you provide the client, and the value you can show you deliver. This could mean expanding your services, for example offering advice on messaging and tone of voice alongside copywriting. Alternatively, you can start offering more strategic guidance and direction to clients, taking more of the burden off them and helping them to deliver better results for the business. It may be that you’ve naturally taken on more of a strategic role as the relationship has developed, in which case use this as an argument for a rate increase. And the more you can link your arguments back to return on investment for the business (ROI), the better.
Build a team:
More and more freelancers are choosing to work in teams, to increase the skills they can offer, the size of project they can take on, and the amount they can charge. With a team or two, three, or even more, you can offer a more complete service, and charge a more substantial retainer fee to match. Another option if you’re overloaded is to outsource small projects to a more junior freelancer, giving them useful experience for their portfolio, while you earn a cut of the fee. This frees you up to focus on higher value, more strategic work.
Cut down your hours:
Freelancing is about flexibility, so it doesn’t make sense for you to be working all hours for less than you’re worth. If you already have more projects than you can handle, this gives you the perfect excuse to boost your rates. Politely explain to clients that you are cutting down on your hours and increasing your rates to allow for this. You may lose a couple of projects in the process, but it will ensure you hold on to those with the kind of budgets you’re after – while giving you the time to focus on winning more.
Charge by the project:
Many freelancers base what they charge on a day or hourly rate, but this can actually end up undervaluing the service you offer and therefore limiting your earnings. For example, if you’re an experienced freelancer, you may be able to write a press release in a relatively short amount of time, but that doesn’t account for all the additional advice, insight and experience you offer on top. Instead, try charging per project, breaking the costs down, not into hours or days, but into the services you’re providing and the value you’re delivering. You’re likely to find clients respond more favourably and feel better about signing off the budget.
Finally, you can always opt for the good old ‘annual increase’, based on inflation, market rates and the greater experience you are now able to offer. Try to do this at a time that makes sense, for example at the end of the calendar or financial year, giving clients one or two months’ notice ahead of the change. That way if they do have any issues with the new rate, you have time to negotiate and if necessary find a new client to replace them.
Increasing your rates can be daunting, but it’s a vital part of running a successful freelance business. Not only will it ensure you earn more, it will also help you work less hours, do more interesting work, and deliver higher quality. Counter-intuitively, you’re also likely to find some bigger clients feel more comfortable paying a bit more, seeing it as a sign of greater professionalism and a higher standard of work. So, if you’ve been putting it off, make sure a rate review is one of your top priorities for 2018.
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