It’s Time to Raise Your Rates

By Carol Tice

Well, 2010 is just around the corner. Time for my first pep-talk for writers for the new decade. Do we feel all fresh and shiny and ready to benefit from the economic recovery? I sure hope so!

Job one: it’s time to raise your rates.

I can hear you quaking in your boots from here. And I live way up in the northwest corner of the U.S. But I want you to consider this. The approach of a new year is a naturally great time to break the news to existing clients that rates are going up. Ideally, you want to put the news out to them in the waning days of ’09, but at worst the first week of ’10. Message: it’s a new year, an improving economy, and my rates are going up.

Maybe not for every client. But if you’re going to keep raising your average hourly rate, you need to keep raising rates.

So it’s time to take a look at who you’re writing for, and what they are paying you. Who pays the least, on an hourly basis? Make a list of your lowest payers.

Now you’ve got a decision to make. There are only two ways to make rates go up: Either existing clients have to pay more, or you have to go out and find better-paying clients, and then drop the lower payers.

So first question: Do you think there is any chance you can get these clients to pay more? If you write for flat-rate content sites or bidding sites, that would be a big no. Their pay will likely remain exactly the same in the coming year. If your clients aren’t negotiable on rates, it’s time to look at your marketing plan for adding better-paying clients ’10.

Will you write advice articles on Biznik? Attend in-person networking events? What’s been working for you in the past? What do you want to try that’s new? Figure out how you will attract new clients this year, and create a schedule for when you’ll do your marketing.

If it is possible your existing clients will pay more, it’s time to write them a letter. Let them know your business is growing and thriving, and rates are rising.

I actually just did this with a client I had on a two-month contract at $1,600 a month. The project suffered from massive scope creep as it went along and became really $3000 or more a month of work. When they let me know they wanted to extend the contract, I informed them I was happy to keep working for them, but not at that rate. I proposed a new rate — not $3,000 as I was sure that would make them bolt, but one that gave me nearly a 30% raise, to the point where I felt the account would be worth continuing and wouldn’t lower my overall average hourly rate.

I documented how the project had changed and what going rates were for the types of work I was now doing. I showed them the massive discount they would still be getting. I mentioned that the economy is turning around and many clients are competing for my time.

And bottom line, rates had to go up. Or I’m walking.

Feels scary, doesn’t it? But you’ll need a little courage if you’re going to increase what you earn year to year.

At the moment I sent this proposal, in mid-December, January was only about half booked up, and a lot of assignments were still hanging and uncertain. But it had to happen, because the point of it all is I need to make a living.

With the economic upswing, now is the time to lock in better rates. You never know when the opportunity will disappear to talk rate increases. I had one hourly-rate client back in late 2007 that I was getting $85 an hour with. I had the sense other freelancers for them were making more, so I told them my rate was going up in the next year to $95 an hour. They grumbled a little, but went for it. (I later learned others were getting $120, so I was still a deal.)

Of course, my timing was great. By early 2008, the economy was collapsing, and I wouldn’t have dared to broach a rate increase. The payoff: it turned out to be a very busy time for this client, and I earned more than $5,000 of additional income over the next 2 years. That’s right, 5 large for doing exactly what I would have done…just getting paid more for it. Because I simply asked for it.

So ask for a raise — you deserve it, and it’s worth the risk.

How will you increase your rates for ’10? Let us know your strategy!

This post originally appeared on the WM Freelance Writer’s Connection.