Freelancing is a competitive way to earn a living – but sometimes you need to raise your prices or ask for more from a client. Here’s how to approach the difficult subject…
British people don’t like to talk about money. And they’re even less inclined to ask for more money – even in a business environment. But keeping your freelance rates the same no matter what’s happening in the economy or your business means it becomes harder for you to expand and grow.
There comes a point when your rates are going to have to go up and you’re going to have to ask regular clients and customers for more money.
Here are a few tips on asking for more money…
Know your worth
Working alone on bespoke projects can make it hard to know exactly what your work is worth. Do some research into the matter by looking at other freelancers’ rate cards, talking with people you know in the industry and seeing what the value of the jobs are for the client.
Another good indicator of your worth is how busy you are. If you’re at the point you’re turning down business because you’re so busy, then it follows you’re probably worth more than you’re charging. If, however, clients are not taking you on it could be that you’re too expensive.
Take into account things like changes in taxes, increase in charges for any premises you use, or the need to buy new equipment to stay relevant in your industry – these are all acceptable reasons to up your rates. Saving for a holiday or new car is not.
Make it clear
Once you’ve worked out what you should be charging, make it clear to all involved that you’re upping your rates. Publish a new rate card with a clear and transparent charging mechanism. You might want to put your basic hourly rate on the card, or if you do set projects, how much you’d charge as a minimum for these.
Send around an email to any past, present or future clients telling them not just what your new rates are, but also why you’re increasing the rates.
For current clients, when you’re letting them know about the increases, it’s also a good time to give them a breakdown of how long you take for each project, what you do, and what other charges you might add (project management, admin, travel costs etc).
Again, for past or current clients find a way to show them the actual value of your work for them.
This could be how you got the work over before deadlines – saving them time and money, how much value the final product added to their company, or how you went above and beyond the initial brief.
Try and get feedback and recommendations from happy clients, and ask them for some figures so that future clients can see that you’ll provide a good return on investment.
While you might be mid-way through a project, so can’t increase the costs for this client, once you do put your prices up you have to do it for everyone – even long-standing clients. Otherwise, if people get wind you’re charging lower rates elsewhere then they’ll want those as well.
If you want to reward loyalty for long-standing client, look at other ways to do it, like providing out-of-hours assistance to them or offering to travel to their offices to give them a run through of the final product.
Be willing to walk away
If a client refuses to pay the new price, you need to be willing to walk away.
Big companies will have people who specialise in negotiating costs, and if you find yourself in a negotiating situation they’re more likely to come out on top. Therefore, you need to have a take it or leave it approach.
If you’re truly worth the extra money, you’ll find work elsewhere at the right value for you. Don’t be held to ransom.
Posted by The Secret Businessman