As an employee at any organization, it’s reasonable to expect a raise each year. You’re better and more efficient at your job, you’ve had big wins and the cost of living goes up. Most employers understand this--and take action.
But as a business owner, are you doing the same for yourself?
So many business owners delay raising prices (and therefore their profits) because they’re afraid that clients won’t pay the higher rates and will leave them.
I’m here to tell you that this is a mindset block that’s truly holding you back. Most clients would be happy to pay higher rates, if it means continued value and support from you. But it’s a process. There are stages to raising your prices and some back-end work that you need to do in order to do it right.
Launch With an Hourly Rate
I typically recommend that service-based business owners start their businesses with an hourly rate. This allows you to develop your workflows and perfect the work you do for clients as you’re getting to know how to actually run a business.
Eventually, you’ll grow until you hit capacity. At this point, you’re trading your time for dollars. If you want to make more money, you’ll be tempted to let that time eat into your personal space--saying no to friends and family, not spending enough time with your kids or partner, forgoing your workouts so you can work more. Resist this urge!
Evaluate What You’re Doing
Instead of working more, it’s time to really evaluate what you’re doing for your clients. Look where you’re getting the best results: which clients and which services. List out what people come to you for most and what they’re asking for that aligns with what you’re doing already. For example, if you’re a graphic designer you may create logos but not branded social media graphics. If you’re a virtual assistant, you may load social content but not write it.
Think about how you can package your top services and any complementary services together. If you’re good at creating social content, go ahead and package writing, graphics creation and loading together. This helps you niche down as a social media VA with services that go together and allows you to charge more because you’re saving your clients the bother of finding a writer. They key here is to adjust your services so you’re doing what you love to do; there’s no sense in adding something you don’t like.
Spotlight Your Value
Here’s where you start talking to clients about new pricing. You’ve done your research and know exactly where the value of your service is. Let clients know what you’ve done for them, what the results have been and what additional value you’re going to offer in your new pricing and packages. If you can, show them concrete numbers--money and time saved, sales coming in, increased list size, improved engagement all as a result of your work.
If you’re adding services to create a complete package, let clients know what additional value you’ll be offering in the future. This could actually be something you’re already doing for clients, but it just hasn’t been spelled out for them yet.
Give Ample Notice
No one likes a surprise invoice that’s higher--or different--than expected. Have a conversation with clients at least 30 days before any changes go into effect. You can send a blanket email to all clients (blind copied, of course) letting them know that you’re making changes. Then, during your next scheduled call with individual clients, be ready to detail out what their own pricing will look like.
Raising prices is something that needs to be well thought out and done strategically. Done wrong, it can make your clients feel unappreciated and strain your relationships.
For help with determining pricing in your business, grab my How to Calculate Your Rate Workbook below. It will help you start on the right foot OR adjust your current pricing to something more sustainable.
