- There may come a point when you need to raise your freelance rates.
- Do some research into your competitors' rates to decide what you should charge.
- Bring up your good work and the rising cost of living when negotiating your rates.
Just because you're self-employed doesn't mean you have to settle for subpar rates.
As a freelance worker, you may have certain talents you bring to the table, such as excellent writing, technical, or web design skills. Negotiating pay rates, however, may be something you're less comfortable doing.
Though it can feel awkward to start imposing higher rates, it's something you may need to do at some point. It's common to start out charging lower rates when you're first breaking into the freelance world. After all, you need a way to lure in clients and build up a workflow.
But just as it's common for salaried workers to see their pay go up over time, freelancers should also be entitled to a bump in pay. Without one, you might struggle to build savings or meet other financial goals. Here's how to negotiate higher rates with your current clients and get new clients on board with them.
1. Look at what your competition is doing
Chances are, you're not the only freelancer around who does what you do. Before you set your new rates, see what your competitors are charging so you can price out your services strategically.
Say you currently charge $40 an hour for the work you do, but you see most of your competitors are charging $50 to $55. That easily makes the case to raise your rates. And if you approach new clients with a $50 hourly rate, you may not get any pushback.
Now, your existing clients may be less than thrilled to see your rates go up. But if you can prove they've been undercharged for a long time and you're really only asking the going rate, it should help soften that blow.
2. Highlight the quality of your work
You may end up raising your rates to the point where you're charging more than some of your competitors. But if you do an outstanding job, that's something you should be able to get away with.
Maybe you're a freelance IT professional who goes above and beyond for clients, responding to emergencies at all hours and fixing problems quickly and efficiently. That's reason enough to justify a higher rate, so don't hesitate to remind your clients of the many times you've bailed them out if they put up a fuss that your rates are increasing.
3. Remind clients your own living costs are rising
These days, inflation is making everyday living costs more expensive for everyone. And that means you have every right to command a wage that enables you to keep up with your bills. That's something you shouldn't hesitate to explain to your existing clients in conjunction with raising rates. In fact, you can expressly state your rates are climbing to keep pace with your rising expenses, some of which may be directly related to the cost of doing your work.
Imagine you're a freelance furniture designer. If you're now paying more than ever to procure the materials you need to craft your pieces, that's reason enough to justify a price hike for the items you're making.
No one deserves to get stuck with stagnant wages. Being a freelancer doesn't mean you can't ever implement higher rates. The key is to present those changes strategically and effectively so your current clients don't get upset and prospective clients aren't turned off.
Alert: highest cash back card we've seen now has 0% intro APR until nearly 2025
If you're using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.