Not necessarily. You know your clients and prospects better than everyone else. Losing clients is something you don’t want, especially if you’re just starting out.
First, ask yourself: Are your current projects interesting to you or do you need to accept every project request that comes your way?
You should keep your current rates if either of these situations applies to you:
- You can’t afford to fire a bad client
- You can’t afford to decline a project
If one of these is the case, you should invest in getting better clients, which means keeping your current rates for now. Otherwise, the question is how much to raise your rates.
Effects of higher rates
When you can afford to decline jobs you don’t like, how many of your clients would stay if you doubled your rates? Every single client would leave, right? No. I’m sure some would stay.
Let’s say 50% of your clients leave when you double your rates. Would this be bad? No, of course not. You would have the same income with only half the effort. That’s simple math. Take your client list and mark the clients, which you think would stay. This will help you to find out, how much you can raise your rates. The goal should be to keep the amount of income and make time to grow from there.
This is how increasing your rates could affect your business:
- High-paying clients will refer you to more high-paying clients
- You have time for fun side projects
- You have more time to work for new clients
Don’t believe an increase of 100% would work for you? It’s okay to take baby steps at first. Try increasing your rates by 20%, 10%, or as little as 5%. This will lead to the same effects as doubling your rates, but with a smaller impact.
Are you thinking about raising your rates or have you increased them recently? Please share your thoughts in the comments.