Regardless of what services you offer, there’s one thing that all freelancers need to do to run a successful business and that is; set their rates.
Money is an uncomfortable subject for many people, and freelancers are no different. But if you’re going to succeed in this business, you’ll need to start making smart financial decisions for yourself, and be prepared to adjust those plans as your business grows. You can’t just set your rates once at the beginning and forget about it. From cost-of-living increases to expanding business needs, there comes a time when all of us will need to reassess what we charge.
But changing rates can be scary. You don’t want to risk offending your existing customers with low rates or start overcharging and driving away potential new clients. So how do you know when it’s time to take the plunge and start sending those rate-change notifications?
Luckily, there are a couple of easy signs to tell when you’re ready.
You are working so many hours that you don’t have time to grow your business
Especially in the beginning, you’re going to need to hustle to build up your client list and get yourself to a comfortable income level. But if your rates are super-low and you’ve taken on so many clients that you no longer have time to build and grow your business.
It’s time for a change.
Your rates must allow time for your business development and whenever you find yourself with too many clients to allow for that, it’s time to firmly increase your rates.
You want to change your pricing structure
The great thing about freelance life is that you truly have the freedom to set up your business however you want. The annoying thing about freelance, however, is that you might not always make the best decisions at first, especially if you’ve never dealt with elements of business before.
One of those tricky decisions can be determining exactly how you’re going to bill your clients.
Do you charge them by the hour? By the word? By the project? Some other metrics maybe?
There are pros and cons to each approach, but unfortunately no matter how much you sit there and plan things out, sometimes you’re just not going to realize what all those pros and cons are until you’re out in the field, doing the work.
It may even be the case that your original pricing structure works great for your content writing, but now you’re branching out to take on longer-term ghost-writing jobs. If any of that is the case for you, don’t despair. It may take a while to get your current clients switched over, but if a pricing structure just isn’t working for you, you absolutely should revise your system.
Your skills have grown beyond your current rates
This one is a little bit harder to quantify, but you should know it when it happens. Maybe you started cheaper than you’d like to be to attract your first clients. Perhaps because you didn’t have a lot of experience, and therefore couldn’t justify the same pay scale as someone who’s been doing this longer than you.
But after a while, you got some experience under your belt. Your clients are happy with you, and you’re adding extra value to your work with all the new skills you’ve learned.
If most of your clients are viewing you as a “bargain” for the quality and amount of services you offer and they are willing to hire you without a negotiation, that’s never a good sign.
Always keep your skills in perspective and make sure you’re charging clients accordingly.
You’d like to shift to a niche market
Niche markets are one of the keys to success in the freelance world, why? Well, because if everyone was skilled enough to work in this niche, it probably wouldn’t be a niche anymore, would it?
But a new market also means a new pool of clients and a new set of expectations, so be sure to do your research before you call yourself a specialist. Just like when you were starting, you’re going to need to determine what the current market rates in your new niche are, to figure out exactly what your skills are worth.
There are many times in your freelance career when you’re going to need to adjust your rates. But with experience, you’ll learn to see when your rate change is coming and UASA’s Independent Professional Sector can assist you with contract drafting and reviewing along with many other services.
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