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One of my favorite things to share on social media is reminding and nudging people to raise their freelance rates or pricing.
And, while I love a good business tweet or Facebook rant about business – it occurred to me that this advice isn’t SUPER helpful without a clear discussion and guide on how to ACTUALLY raise your rates.
I love inspiring posts, but if folks can’t DO anything with them, then they’re, well, worthless.
Let’s Talk Freelance Rates & Pricing!
This is going to be a long post (I’m diving in DEEP), and my goal is to answer the following questions:
- What minimum freelance rate should I set?
- What can I do to easily increase my hourly rate?
- How do I increase my rates? What are the actual steps?
My Qualifications (Real Quick!)
I want you to know that I have experience doing this, so real quick: My name is Brianne, and I started freelancing in 2010. I’ve been freelancing for 10 years in a variety of spaces, from social media marketing to UI/UX design to career coaching. I’ve made over $20,000 on websites like UpWork, and I get the struggle around rates.
What Freelance Rates Should I Set?
An issue I see with freelancers is that we don’t give ourselves pay raises! Folks will charge the same rates today as they did 5+ years ago!!!
Honey, no!! This is not helpful!
When it comes to being a full-time freelancer, you need to get to $100 per hour as quickly as possible. I know that this will seem shocking to some of the virtual assistants and folks out there, but here’s why:
Until you hit $100ph, you are actively losing money. From paying for health insurance and business insurance to being able to contribute to your retirement account, charging less than $100 per hour means you are taking on a lot of risk and burden.
Freelance Rates Should Be No Less Than $50ph
If you are full-time freelancer, you should not be charging less than $50 per hour, unless you’re living in Southeast Asia and don’t have to deal with the US cost of living.
A lot of companies and clients don’t get this, which is why I advocate for project pricing – not hourly rates. A project price incentivizes you to be as efficient as possible, and you make more per hour the better you are at your job!
Stop Calling Yourself a “Freelancer”
I use the term “freelancer” in this blog post a lot, because it’s good SEO. I know people are googling things like “how to raise your rates as a freelancer” or “how to make more money as a freelancer.”
But, here’s the thing. I stopped calling myself a “freelancer” a couple of years into the game.
Because the word “freelancer” literally has the word “free” in it, and I’m not free! Through 10+ years of being self-employed and coaching clients who are self-employed, I’ve learned that you can easily level up in you offering by simply NOT USING THE DANG WORD! A lot of companies and clients seem to think freelancers should charge pennies, so we have to use a different word.
- Specialist (ie “Social media specialist” not “social media freelancer”)
- Whiz or Maven
How to Raise Freelance Rates – 3 Strategies & Tips
Okay, so now that we’ve had some real talk on what a minimum rate is, let’s discuss a few of my favorite ways to raise rates:
Strategy #1: Build Freelance Rate Increases Into Contracts
One of the easiest ways to raise your rates is to inform clients in your contract that you will do so! If you’re signing a longterm contract with a client as a freelancer, be sure to have a section somewhere in there about “Updated Rates and Pricing.”
In that section, note that you renegotiate with clients every year, quarter or 2x a year. Note in the section that new rates will be based on past performance and the market.
Some folks even build in an automatic rate increase, saying something like, “After 1 year of working together (on January 22, 2022), rates will automatically increase by 7%.” That way, you’re at least keeping up with an inflation rate, and getting paid more for more experience.
Alternatively, look at how much $$$ you made the client and negotiate based on that. Figure out how to tie your work to saving or making he client money, and then ask for a percentage!
[Need help figuring out how much to increase your rates by? Book me for a 1:1 session HERE, and I’ll help you put together a proposal you can use for future clients.]
Strategy #2: Raise Freelance Hourly Rate by 10-20% with Every New Client
This is a CRITICAL strategy, especially if you’re not at the $100ph mark. With every new client you pitch, raise your rates 10-20% in the pitch. If you’ve landed a client at $35ph, then future proposals should have a rate of $38 – $45ph.
By doing this, you’re automating giving yourself a raise! And you avoid the nasty mistake of failing to increase your rate for years.
Keep on raising your rate until you get a few rejections in a row. But don’t settle for that rate! Figure out what skills you have that you can charge more for, and then focus on marketing those skills (or gaining new skills that snag a higher hourly rate.)
Hot Tip: Tie your work to performance metrics (also called “KPIs” or “Key Performance Indicators). Being able to tie your work to measurable improvements makes it easier to show your value – and get paid more.
[Trying to figure out what monthly rates to charge? Book me for a 1:1 coaching session, and I’ll help you create a servicing offering and pricing!)
Strategy #3: Fire or Hand Off Lowest Paying Freelance Clients
There’s a quote that goes something like, “It’s impossible to be a prophet in your own country.” Put another way, this means that when people feel like they know you, they’re less likely to buy-in to the new and improved you.
If you sign a client at $25 per hour, there’s almost ZERO chance that that client will keep increasing your rates to $100 per hour. It doesn’t matter how much of a rockstar you are, businesses can be pretty firm in the dollar amount they assign to someone. They often can’t see how you’ve leveled up in skill since starting.
Eventually, it will come time to fire them. Or “let them go,” whichever phrase makes you more jazzed.
I recommend replacing lower paying clients after you have secured and onboarded a higher paying client, and you’re pretty sure the new client will work out. Don’t hand off the old client too soon! You will have a few weeks where you work longer hours, as you vet the new client!
When it comes time to hand-off the lower paying client, end the contract per the agreement in your contract (are you seeing how important a thorough contract is?). I recommend giving the client 30 days notice, and you can share the contact info of a few freelancers they can meet with.
WARNING: Don’t Work More than 10-12 Hours Per Freelance Client
All of these strategies require that you be in a strong negotiating position. If you are working 30-40 hours per week for one client, it’s difficult to walk away. A good negotiation requires that you be able to walk away!!
For this reason, I only allocate 10-12 hours of my time to a client. If they want more than that, then they should hire an employee. Above 12 hours a week, a client can terminate the contract (ie fire you), and you won’t have the same safety net as an employee.
Diversify your risk! Don’t put all of your eggs in one basket.
WARNING: Vet Potential Freelance Clients
The difference between a freelancer who is dancing in money and a stressed out freelancer who is STILL waiting on invoices to be paid is usually this:
Smart freelancers vet clients. Often, I see coaching clients who are freelancers forget to do this. It is imperative that you speak to other freelancers who work for the org (past or present), and that they have good things to say.
If a client can’t put you in touch with a past freelancer because “none of them have worked out,” that’s a red flag, baby!
I also make sure to charge a deposit when working with a new longterm client on retainer, as I want to be sure their invoicing systems are all set up and ready to go.
It’s tempting to take on a new client just because they’ve popped into your inbox – but don’t do it!! An ounce of prevention is worth a pound of cure, and a terrible client can make your life MISERABLE.
For Future Thought: Become a
“Consultant” – Not a “Freelancer”
Around year 5 (ish) of freelancing, I got tired of it all. I realized i wasn’t into doing the work, but I loved teaching people how to do it. I rebranded myself as a consultant, and now clients pay me to help them hire employees and freelancers! I consult and create strategy for clients, and I teach people how to do things. I also run classes and coach mastermind groups.
Eventually in your freelance career, you’ll move to consulting on how to do the work – instead of just doing it. The earlier you can do this the better, as the title “Consultant” tends to inspire a higher hourly wage.
Need help increasing your freelance hourly rate? Let’s work together! Click here to book a session.
Additional Helpful Posts
I love writing about freelancing and sharing career tips! Here are a few other posts that may interest you: