You weren’t born knowing how to set prices for your small business, or when to raise your rates. You may not have any idea what a fair price is if you’re new to your industry! Even if you have past experience, your former boss probably didn’t clue you in on the gap between your hourly rate and what they charged the client.
A lot of us hesitate to raise our rates, even when someone tells us we should, because of what we don’t know. What if we set a price that’s way higher than our competitors? Will we lose clients if we raise our rates? Can we even justify a higher rate?
If you’re looking for permission to just do it already, I’m here to give it to you. It’s probably past time for you to start charging more, and here’s why.
Raise your rates if you know more than you did before.
Back when you first set your prices, you may not have known what you were getting into. Still, even when impostor syndrome is making you feel like you don’t know anything, it’s still a fact that you definitely know more than you did yesterday.
You’ve put in hours of work since you first set your prices, and you’ve learned from each of the experiences you’ve had during those hours. You’re always learning, and you deserve credit for that, so give yourself that credit.
Your process has gotten better.
A lot of surprises can lurk within the process of getting from start-to-finish with your client, especially when you’re starting out. Every time you experience an unexpected hiccup, though, you likely tweak that process so that hiccup doesn’t happen again in the future, right?
From intake to delivering the goods, you’re doing your work more smoothly and efficiently than you used to, and that leads to a better client experience. Bringing ease to your clients’ work with you has value, too.
You can do the same work in less time.
The time you spend on your work is a big consideration when you charge an hourly rate. As you get more practiced at what you do, you’re able to do it faster than before… which means you’d spend less time, and make less money than before. That doesn’t make sense!
If you bill by the hour, it’s worth your while to regularly evaluate your skill level, and raise your rates accordingly. If you don’t already use a time tracker, start using one–it can give you a better sense of the time you spend on each of your clients.
The world is getting more expensive. (sorry)
If you had a day job before starting your own business, you might have heard the phrase, “Cost of Living Adjustment.” Over time, it tends to take more money to keep up the same lifestyle, so a lot of corporations and government organizations regularly increase pay to keep up with the cost of living.
Or, maybe you’ve been to your favorite restaurant recently, and seen a notice that they’ve raised their prices. If the food they use to make your meal costs more than it did a year ago, they’ll have to raise their prices similarly.
What it all boils down to is that doing things in the world just costs more than it used to. (bummer!) So, if it costs you more to buy supplies for your business, or to buy lunch for yourself, it might be time to bump up your own rates to compensate.
Above all, remind yourself that yesterday’s price is not today’s price. Things like developing new skills, gaining experience, and leveling up your brand are a given as you grow your business. Consider the value you bring to your clients, and what rate will justify that. As long as your new rate matches the quality of services you’ll offer, don’t be afraid to aim high!