Remind HN: Raise your rates | Hacker News Reader

Remind HN: Raise your rates

64 pointsoscardelben24 comments

With the new year coming, I think it's the right time for every freelancer to consider raising their rates.

I know this is something that most people hate to do, but we're in business and everyone of us know how hard it is to keep going at certain time.

I've found these templates very useful in my situation: http://freelancember.com/email-templates/

Don't forget that raising your rates means that you'll be able to stay in business for a longer time.

Even if your clients rejects your proposal, it's still worth trying.

What to do with the new money? Start a saving account and use it as your personal insurance for tough times, or invest them in your business to provide even more higher quality.

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The author of those templates should read this...

http://www.amazon.com/How-Win-Friends-Influence-People/dp/14...

By all means, try to raise your rates. The first step toward being paid a lot of money is asking for it.

But if these templates sound like a good idea to you, you need to focus on something else first. The only way you could change your rate via email is if you're doing your freelance work without a formal contract, which is a colossal mistake.

So, forget these email templates. First, get all your clients to sign a services agreement. The time to negotiate your rate is when you and your client draft and sign the statements of work appended to that agreement.

With the new year coming is time to think: how have I improved my value?

I've found this is better to do at non-xmas times, especially when you're really busy and need fewer clients.

In my experience, customers generally expect new rates to start with your fiscal year, and Jan 1 is an obvious start to a fiscal year.

YMMV

Ours are set quarterly, usually to the prior quarter's prices, but more when the work load demands fewer hours. Usually contracts (which run for a <year) lock-in the rate for the quarter they're made.

January 1st is an obvious start to the calendar year, not the fiscal year.

In the UK the fiscal year begins in early April, and while different countries do have different starts to the fiscal year, few of them (not, for example, UK or USA) start on January 1st.

For many types of companies in the US, you have to basically convince the government to let you have one other than jan1 - dec 31.

Not according to Wikipedia:

"The U.S. government's fiscal year begins on October 1 of the previous calendar year and ends on September 30"

Or About.com:

"The Federal Fiscal Year runs from October 1 of the prior year through September 30 of the next year."

That's the government's fiscal year, not your company's fiscal year.

My bad: "The tax year for a business is governed by the fiscal year it chooses."

That's the US government's fiscal year. It's also one of the biggest reasons you can convince them to let them use that fiscal year (if you do a lot of government business, like a military contractor).

January 1st is the default fiscal method for all taxpayers in the US. Business entities can choose to use their fiscal year as their tax year when they incorporate/charter. Individuals can also choose a non-calendar year tax year, but only before they file their first tax return.

All US taxpayers can change their tax year by petitioning the IRS for a change of taxable year; this is usually granted without hassle for businesses (i.e, C-Corporations), but almost never for individuals.

Cheers for the clarification, clearly my knowledge is pretty UK biased :)

If I could convince the expenses people in my company of that, it would get them off my back until after Christmas.

Those templates are awfully written and I'd do it face-to-face anyway.

I find people who drop bombshells in emails even though I see them all the time to be a particularly distasteful form of business associate.

I agree with your latter point, but nowadays a lot of freelancers rarely or never meet their clients (especially if they're overseas).

That said, I'd still put e-mail as a better medium for this than the phone. Even if you worded it just right, it's awkward for the client too because it's not exactly something to celebrate but nor do they want to look cheap. E-mail provides the right level of formality for contractual/pricing discussions, IMHO at least.

If you don't raise rates once a year you will need another reason when you do decide to. At very least you would want to tie and increase to inflation.

Completely different business but my dad got into the trap of leaving his rates constant for many years, so each year your in effect making less and the client has an expectation that the rates won't move.

Hi, I'm the writer behind Freelancember. I agree with the other commentor who said you shouldn't just drop a bomb shell like this in email. That's why, naturally, Freelancember has several other rate-increasing-related guides before the templates:

http://freelancember.com/top-10-reasons-to-raise-your-freela...

http://freelancember.com/downloads/FreelancemberDay6.pdf

http://freelancember.com/raise-your-rates-checklist/

Is it 'right' to raise your rates on such short notice? Wouldn't most contract work have stipulations regarding changes in price?

i agree... i usually give 30 days notice for an existing client.

This is why I prefer to do shorter, per-project contracts. It allows for rate changes (up or down) if desired, or a clean break if not.

I've survived, and even succeeded (by some, maybe most, measures) through my first year of full-time freelance web development.

I have some clients, who came onboard very early on in my professional and personal development as a freelance dev, and who are still being billed at their original rates. I notified these clients at the beginning of November that I am working to bring all rates "on par" across the board.

Even clients who are currently receiving the benefit of your older, lower rates will agree to the economics of paying a competitive price for the same quality of service that you provide to your highest paying clients. The dialog that began in November has proven fruitful in terms of developing a strategy to get all of my current, ongoing clients to agree to the new rate structure.

Bottom line: Have too much work, or too many "potential clients" hounding you for proposals? Raise your rates. Want to keep your clients? Give them notice well ahead of time, then raise your rates.

If you're under contract, the rate or the mechanism to change the rate should be baked in for the protection of both parties. That's the point of a contract - defined terms over defined times.

Separate to that, if you're working ad-hoc (as is surprisingly common) it might be unprofessional to jack up your rates in an instant, but it's not necessarily a moral wrong since it's your life, your time, and you're no-one's slave (unless under contract). It's on a par with just ditching a client outright.

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