It’s one of the biggest hurdles for new entrepreneurs… Figuring out how much they should charge for their services! But once you set a rate, don’t assume this number is set in stone and never changes. It’s standard practice across all businesses to annually increase rates. But how do you know when it’s time to do so?
As your business grows, and you develop more expertise and clients, it’ll be important to periodically review your rates. If you’re unsure if you have a solid reason to raise your rates, keep reading to see if you fall into any of these categories below!
When it’s time to up those prices:
1. You’ve invested in training or education.
Let’s say you have invested in additional education to help you hone in your skill set, streamline your processes and refine your offers. This leads to proper positioning of your services in your market, while feeling confident about the value you bring to your clients. If you’ve checked all of the boxes in this section, then it’s time for you to raise your rates.
2. You’re charging significantly less than your competitors with the same expertise.
Ask yourself: What do I do better than my competition? What is your unique value proposition? Explore how your business is different from your competition and use that as a basis for raising your rates. If you can prove the value and results you have delivered to past clients, then your services will sell themselves regardless of a price increase.
3. When you are spread too thin.
If you are working six to seven days a week from sunrise to sunset with no vacation time in sight, then you are simply working too much and run the risk of burning out. When you have more work than you can handle, it’ll be beneficial to raise your rates and hire an additional team member to outsource some of the work to.
4. When you are preparing your business to transition or grow.
If you are looking to scale your business with added value, this is a great opportunity to raise your rates. Your clients will see that they are getting something extra special with their investment and shouldn’t mind the price increase within reason.
5. When you work all the time and still never seem to have enough.
Do you feel like you are working all the time, yet barely have enough revenue to keep the lights on? Then it’s time to figure out where the discrepancy is between what you’re earning and what you need to live. Start with your necessary business and living expenses and work your way from there.
6. When you’re booked out for the next 3 months.
You’re in demand! You know your services are sought after, and this means that clients will be open to a rate increase. Take advantage of this golden opportunity to raise your rates.
7. When you live somewhere with a high cost of living.
Lastly, it’s important to factor whether you live somewhere with a high cost of living. For instance, a designer who is doing remote work while living in Los Angeles is going to need to charge more than someone doing remote work while living in Indiana. Figure out how much you need to earn to cover the cost of living.
Now that you’ve decided it’s time to raise your rates, test the waters of a higher rate with existing clients and see if they’re receptive. Remember, rate increases are a natural part of doing business!
Want to take the leap and raise those rates? You're in luck. We're hosting a FREE live masterclass Tuesday April 13th at Noon PST / 3pm ET just for designers! Click here to register for our Raise your Rates and Scale your Biz Masterclass: