Top 5 Reasons Not To Raise Your Rates As A Freelancer

Before I get into the top 10 reasons why freelancer’s shouldn’t raise their rates, allow me to introduce myself.

Hi. My name is Marie Kyle, a new member of the CHD Collective family, but not new to the world, or even to freelancing by any means.  I’ve worked as a UX developer, visual designer and tech consultant for quite a few years. Through out that time, I have heard some pretty bizarre ideas not only about what motivates freelancers to set their rates the way they do, but also why some freelancers can’t rationalize raising their rates.  Here are the the top 10 dumbest reasons not to raise your rates as a freelancer:

Reason 1:

You like being a lifelong member member of the Broke Phi Broke Fraternity

Common excuse: “I really need the money, and this rate is the best I can do”

Reason 2:

You believe that anyone who gives you money is worth your time

Common excuse: “My client gives me a lot of hours, so I give them a wholesale rate”

Reason 3:

You have no sense of self worth

Common excuse: “Even though my client says things like ‘Hey, your Flash sites run great on my Android phone. Why are you developing in HTML?‘ I have to pay my dues.”

Reason 4:

You don’t care about your health

Common Excuse: “I’m completely healthy, and never go to the doctor so I don’t need health insurance anyway. No reason to raise my rates for something I don’t need”

Reason 5:

You believe that if you raise your rates, you will have no clients

Common Excuse: “I’ve been charging $35 per hour for years, if raise my rates out of the blue, I’ll have no clients”

 

Moral of the story?

While raising your rates may change your client list, raising your rates will allow you to see your clients true colors and gauge whether or not they are coming to you because they value the quality of your work, or because they are looking for a cheap deal. It may be tempting to beleive that having the lowest rates will secure you some cash flow, but over time that  strategy  will quickly become unsustainable when someone else comes along and offers and even lower rate.

 

So what can you do?

Tailoring your services to a higher caliber clientele will allow you to see they people looking for higher quality tend to pay more, and will be loyal to you not because of the prices you charge, but the value you provide.

And while I can admit, like most freelancers, at one point in time I suffered from the same delusions listed in this top 5 list – I am now here to encourage you to grab 2012 by its hairy nuts, take a chance and raise your rates if you haven’t already done so.

 

But we’re in a recession, and no one is hiring

I know, I know….I can already hear the naysayers, spewing crap like ‘but Marie, we’re in a recession so nobody is hiring’ and that’s a bunch of bullshit. I mean, it’s not bullshit that we are in a recession. It’s very real, as evidenced by the millions upon millions of displaced workers and families in the United States. But what I do think is bullshit is the idea that because of the recession, all american currency has somehow evaporated into thin air with no hope of reappearing.  The thing freelancers need to realize is that, though the sources of your income in the past may have dried up, there are a shit ton of startups, creative and contractor service agenciesand organizations either looking to bring on full time talent, or outsource overflow work. The money is out there, you just have to get more creative about how you find your work. In order to survive, today’s freelancer needs to follow the money, where ever it may lead.

 

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