You’re a passionate freelancer and you’re delivering exceptional work, but your earnings don’t quite match the value you’re providing.
It’s a common pitfall for many freelancers, especially those in their early years. While starting with modest rates has its merits, recognizing when to level up is critical for long-term success.
This is something I learned the hard way. Early in my freelancing career, I spent many years undercharging, working myself crazy trying to make more, and never actually getting there.
When you’re new to the game, it can be hard to see what’s right in front of you, so keep reading if you want to catch the warning signs and get ahead.
The problem with undercharging: You’re stuck working long hours for low pay, unable to get ahead on your bills or grow your business.
The benefit of solving it: Your income catches up with your expertise and you can start to build your business and your savings.
Why what you’ve tried has failed: You’ve been scared and stayed in your comfort zone, without a real plan or strategy for building your business and charging more. You’re not sure you’re “ready” to take the step to ask for more.
Here’s how to know it’s time to raise your rates: Raising your freelancing rates isn’t just about numbers; it’s about respect for your craft and the experience you bring to the table. But when you’re new, it can be hard to know if it’s time to make the change. Look for these 5 tell-tale signs it’s time for you to raise your rates…
- Demand Outweighs Supply: Are you saying “no” to more projects than you’re accepting? That’s a clear sign that your services are sought after. When your calendar is consistently packed, it’s a great time to start experimenting with your rate. Don’t take a new project/client at your current rate, raise it by 20% or more and see what happens.
- Experience and Skills Have Grown: You’ve gained knowledge, you’re more efficient, and your work quality has improved. If you’re producing results that go beyond what you did last year, it’s only fair your earnings reflect that growth. Email your current clients explaining this and let them know the timeline they can expect for the change.
- You’re Turning into a Go-To Expert: If clients are seeking you out for your niche expertise, it’s a sign that you’re becoming a trusted authority in your field. This high demand for your knowledge translates into a justified rate hike. Your current clients likely see this change happening and will want to keep you more than ever, so don’t be afraid. Even if they can’t meet the new rate, you’re a sought-after professional with plenty of potential clients.
- Your Current Clients Are Thrilled: If your clients are consistently happy with your work and they’ve even referred you to others, that’s a clear indicator that your value proposition is strong. You are in a good position to raise the standard rate for your excellent work.
- You’re Overworked: Is this not fun anymore? You’re overworked and facing potential burnout? Your time is valuable, and if it’s being stretched too thin in an effort to make ends meet, it’s a strong sign you are undercharging on your projects.
Remember, this isn’t a one-time thing. Throughout your career, as your skills improve and your reputation grows, your rates should follow suit. Reassess every quarter to make sure your rates most accurately reflect the value you bring to your projects.
And when it IS time to negotiate the raise, how do you go about it? Stay tuned for next week’s email where we’ll talk about HOW to actually approach your current clients and most effectively communicate your changing rate.