I’m a big fan of clean slates. For me, January 1st is a time for reflection and the best time to get a fresh start going. I like to take time out before the start of the new year to assess my situation and decide if it’s time to raise my rates. I know from speaking with some of the members of the FWJ community, many of you are afraid of raising your freelance writing rates because you don’t want to lose your clients to a freelance writer with a lower price. While that thinking is understandable, it’s flawed. If you’re a good writer and your clients appreciate your service, they’ll pay an reasonable increase in rates. Moreover, if they drop you because of raising your rates, you probably weren’t a good fit and need to find someone who knows you’re worth the price.
Raising rates takes confidence, but if you’re a good writer and have a reputation to match, you deserve a rate befitting your talent.
5 Signs to Help You Determine If it’s Time to Raise Your Freelance Writing Rates
So how do you know if you should raise your rates? Here are a few hints:
1. The End Doesn’t Justify the Means
You work eight to ten hours each day, yet the amount of money you earn comes no where close to the amount of work you’re putting into it. Getting your foot in the door is one thing, not getting paid what you’re worth is a whole other story. Go over all your earnings vs all the work you do and see if you can still justify the rates. Try this: take all the money you earn in a given month and divide it by the hours worked. If it’s turning out to be only a couple of dollars for an hour of writing and research, something is wrong. Sometimes even a small raise of $5 to $10 more for an hour or task makes a large difference.
2. You’re Only Breaking Even
Calculate your earnings vs. the work put into your writing, vs expenses including overhead, operational costs, outsourcing, healthcare and taxes. Are you still earning a profit? Many freelancers charge a rate without actually considering the big picture. Factor in everything that goes into your business when setting your rates. It’s not enough to simply break even, you should be putting money into the bank. There should be enough left over to support yourself (and/or your family) and build your business. If not, you need to rethink your rate.
3. Your Clients Are Always Pleased
If you turn in clean work every time and your clients are always giving you positive feedback, congratulations – you earned a pay raise. Many salaried employees receive cost of living increases every year and freelancers shouldn’t be any different. Use your client’s feedback as your year end review. Do you deserve an increase? If so, ask. If your clients are pleased with your work, they’ll want to keep you around. They don’t mind paying a reasonable increase in rates if it means they’re getting quality.
4. You Have More Work Than You Can Handle
Are the clients knocking down your door? If you find yourself with more freelance writing work than you can handle and less time with “real world” activities, it’s time to raise your rates. If you’re in demand, your rates should reflect this. The clients who only wanted you because of an inexpensive rate may move on, but the clients who want a good writer they trust will pay your price enabling you to work smarter not harder.
5. You No Longer Need to Undercut the Competition
Sure, charging a lower rate enabled you to get a foot in the door but you no longer need it. You have plenty of clients and a good reputation. You bring in more business via word of mouth recommendations than advertising and marketing. Not only is your foot in the door, your whole body came through. It’s time to set your own bar and not worry about what the “competition” is charging.
What factors do you use to determine when you should raise your rates?