When Should You Give Yourself A Raise As A Freelancer?

When you first started freelancing, you were probably just happy to find paying clients. But then months go by, and you become more confident in your role. The quality of your work improves, and you begin to take on more and more clients.

And at this point, many freelancers begin to wonder if it’s time to raise their rates to maximize earning potential. But raising your rates as a freelancer can be a scary concept. How do you ask for a raise without scaring off all your current clients?

When Should You Raise Your Rates?

One of the tough things about freelancing is that there’s no boss to tell you that it’s time for your yearly review, or that you’ve earned a raise. You have to figure out when the time is right for yourself.

Raising your rates can be a difficult subject to broach with your clients, so you don’t want to rush this decision. Here are four signs that it may be time to raise your rates:

1. You’re indispensable to your clients

One of the biggest mistakes many freelancers make is that they try to raise their prices without providing more value first. So honestly evaluate where you’re at with your current clients.

Are you meeting or even exceeding all of your deadlines? Do you turn in quality work? Do they seem happy with your performance, or are they always having to go back and fix your mistakes?

Before you ask for a raise, you should be certain that you’re overdelivering for your clients and that you deserve it. If you have to justify a higher price tag to your clients, then it probably isn’t time to ask for a raise.

2. It makes sense financially

For most freelancers, being fully booked with clients is the ultimate dream. A fully booked schedule is what allows you to create a consistent monthly income and even to have something extra to put away for savings and retirement.

However, you may reach a point where you’re so busy with your current clients that you don’t have the bandwidth to take on any new work. This limits your earning potential because you don’t have the option to take on a new, higher-paying client.

When this happens, it’s probably time to talk to your current clients about raising your prices. Raising your rates will allow you to increase your earnings so you can better manage your personal finances.

3. You haven’t raised your rates in over a year

Assuming the economy is doing well, it’s a good idea to raise your rates about once a year. At the very least, you should raise your rates with the rate of inflation, so you aren’t losing money over the long run. 

4. You’re okay with the thought of losing a client or two

You need to understand that by raising your rates, some of your clients may decide that to leave. If the idea makes you sick to your stomach and you don’t think you can handle it financially, then it’s probably not time to raise your rates.

But if you’re okay with the thought of losing a client or two, then you may be ready for this next step. 

How to Approach Your Clients

Once you know it’s time to raise your rates, how do you approach this subject with your clients? If you’ve never done this before, then you’re probably feeling nervous and unsure of where to start.

Here are four ways you can raise your rates without scaring off your clients:

1. Give them time to process the news

One of the biggest mistakes many freelancers make is that they don’t give their clients a lot of notice. Nobody likes to be caught off guard by a sudden rate increase.

Ideally, you should let your clients know about your rate increase at least a couple of months in advance. This gives them time to process the news and adjust their budget accordingly.

2. Don’t increase your rates too soon with new clients

If you just started working with a client last month, then it’s too soon to raise your prices with them. You haven’t had enough time to build a relationship with that client and prove to them that you’re worth the extra money.

In general, it’s a good idea to work with a client consistently for at least six months to a year before you start inquiring about a raise.

3. Be confident

It’s important that when you contact your clients, you approach them with confidence. If you act uncomfortable or awkward, then they’re probably going to feel uncomfortable about the request as well.

Don’t apologize or over-explain yourself. Confidently let them know why you’re asking for a raise, knowing that you’ve worked hard and you deserve it.

4. Be willing to negotiate

As a freelancer, there’s nothing more valuable than the relationships you’ve built with your current clients. So you should always be willing to negotiate with your clients and meet them where they are.

If one of your clients says they can’t afford the raise you’re asking for, be open to negotiating. Maybe they could give you a slightly smaller rate increase. Or perhaps they could lower your current workload so you can continue working with them, but have more room in your schedule for new clients.

Bottom Line

In the past, freelancing was often viewed as a hop, skip, and a jump away from unemployment. But this has changed in recent years with the rise of the gig economy.

Starting a freelancing business gives you the flexibility to work from home, choose who you work with, and create your own schedule. You’re also responsible for managing your income, so make sure you’re getting paid what you’re worth.