Raising prices is one of the quickest, easiest, and best ways to bring in more revenue to your business. It’s a great way to give yourself some freedom and space to create your best work and deliver it in a way that feels good.
Charging what you need allows you some padding in your budget to go the extra mile for clients.
If you're constantly feeling like you're not charging enough, you can feel pinched—your creativity can be stifled, you might feel like you can't quite do the level of work that you want to be amazing and truly help someone.
I’ve observed a lot of hesitancy around raising prices, and more so now, at the time of this recording in 2022. There's a lot of talk about inflation, and everything downright costs more. So it can feel weird…on the one hand, you might be thinking, “I really should be charging more because everything costs more for me,” but at the same time, we might be thinking, “Well, how can I do that to my client? They're in the same boat that I am.”
As creatives, we tend to undervalue ourselves. Because our work feels fun and exciting and easy to us, we maybe don’t fully see the value we bring to others who don't have the same skills and talents. This is something to know about pricing and selling in general.
And, to be clear, the pricing I'm talking about today applies to whether you're hourly based or if your pricing is value-based or as a package. However you choose to charge for your work, those prices need to increase over time.
When I first started freelancing, I stayed at the same hourly rate for years and years, and I didn't think much about it until a friend told me I should raise my prices. If you're anything like me, you're not alone here. If you're starting and still working on your skills and setting up your business, you may not quite be ready to charge more yet, but just have this in the back of your mind that as you gain experience, you need to increase your prices.
Benefits of raising prices:
- Besides the obvious of making more money, raising your prices allows you to have a little more breathing room, so you don’t have to take on every single project just because you need to pay the bills.
- Raising prices shows you have confidence in yourself and your business. What many don’t realize is that this energy alone attracts great clients.
The main objection people may have to raising prices is that they think all their clients will leave or fire them. To encourage you, clients have not left every time I've raised my prices.
Think of it this way: Even if some clients leave, you are still making more money and spending less time working.
But even if one or two leave, it's probably not going to be the end of the world.
Anytime I’m making an uncomfortable decision in my business, such as this, I put myself through this simple exercise first. I stop and ask myself, “What’s the worst that can happen?”
Usually, the reality of what happens isn’t even remotely close to the worst thing that can happen, and this helps me build up courage, take that leap and go for it!
Raising prices can feel scary when you're building a business, but it's just a normal part of business, right? We all know this—try to embrace it.
So how do you know if you should raise prices?
Here are a few factors I've noticed in my business that can help you decide:
- You're booked out all the time, or you're turning down work.
- Your proposals are being accepted most of the time. If clients often accept your proposals without hesitation, you probably could have charged more.
- You're getting amazing feedback, reviews, and referrals for more work. This tells you that you are a good value for what you're charging and that clients will probably pay even more. So, if you're constantly getting wonderful feedback (which I'm sure you are), think about that. Clients who find someone they love working with want to stay with them. It’s far easier than looking for a new designer. And if they love working with you, they're likely willing to pay a little more so they can keep working with YOU!
- Has it been a while since you've raised your prices? Some people teach that you should raise your prices every six months. I typically raise prices about once a year. The more projects you do, you get better, you get faster, you get stronger, and you increase your marketing and business knowledge which all help to create better results for your clients. If you are getting better, faster, and stronger, your pricing should reflect it.
When you start charging more, you can actually take on fewer projects. So what will you do with your extra time? Maybe you'll find another dream client, optimize your website, work on crafting your packages, and fine-tune your work processes. Maybe you'll plan a vacation or just get out there and live your life!
As we all know, raising prices periodically is normal in any business. Think about any business out there—prices are always going up. And, when you increase prices consistently, clients will learn to expect it as part of your normal cadence. It's part of business; it's part of making a living. It also shows you are a savvy business owner in charge of your business’ success.
I feel good hiring someone who understands how to run a successful business. What about you?
Bottom line: Charging more allows you to keep your amazing level of service and quality of work and then some!
Pro tips for how to go about raising prices:
- Give your clients a heads up that your rates are increasing. I like to do this near the end of the year or the first part of a new year as part of an annual check-in with clients. A heads up a few months before an increase gives them time to get used to the idea AND make sure their budgets allow for the increase.
- How much should you raise your prices? There are many factors to consider, and this is your decision—I typically raise prices by about 10%. However, if you’re severely undercharging, I’d think about increasing by 30-50% if you can.
- Remember that YOUR pricing is just that: yours. It's yours because only you can deliver work in the exact way you do, so clients who love working with you won't mind paying a little more for more of you. I see designers forget this part and lump themselves into commodity-based thinking and pricing. Resist thinking that there are a million designers out there and that you need to charge what they're charging to be competitive. It’s simply not true. Set yourself apart with your service, messaging, and work so that clients enjoy you and your personality. They hire the work because of you.
Finally - let’s talk about the pesky money mindset piece…
Some creatives might decide that raising prices isn't a good idea because they think it will be hard for their client.
But here's something to consider: by allowing this thinking, you assume that clients view money and hiring services the same way you do. However, your services to them are an investment, not an expense. When you find clients who understand that you'll never go without work. Share your service offerings with confidence, and speak about your work as an investment because of the results clients will receive.
I get that this is a big concept to embody, so even if you don't fully believe it yet, I urge you to just try on this mindset that your work is an investment, not an expense. Start thinking and speaking about your work in this manner.
And pretty soon, you'll start believing it and seeing it play out in your business. Your services are an investment that helps someone else go further in their business and make more money. Therefore, don't discuss your services as just a list of deliverables. Talk about what this logo, brochure, or website will DO for your client’s business!
There's an amazing book I've spoken about before, and it's one that I'm going to read repeatedly. It's called You Are a Badass at Making Money by Jen Sincero. You can find it on Amazon, anywhere books are sold.
It's an entertaining, delightful read and helpful if you want to learn more about the psychology of money and pricing and some of these mindset shifts that can help you charge what your work is worth. I encourage you to check that out.
Finally, let’s remember that clients are adults.
Let them decide what they can afford.
And you do what you need to do to build a profitable business unapologetically. That's my wish for you and me, for ALL of us on this wild creative business-building journey.
GO DEEPER: For in-depth, step-by-step trainings to help you take charge of your business, earn more with less stress, and enjoy your business, check out my comprehensive course, Behind Design: Tools to Thrive in Your Creative Business.
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