I’ve been very fortunate as of late in terms of getting new clients. Over the past 5 or 6 months, 3 companies have hired me, outsourcing their CSS / XHTML work to me. The first company I started with offered me $x, the second company offered me $x + 25%, and the third company has offered me $x + 50%.
With a lot more experience under my belt, and having proven my work ethic, reliability, and good code, should I go about asking the first company for a raise? While freelancing, does your overall rate keep increasing when a new client offers more, or do you have to honor what you signed up for? How long should you wait before asking for a raise?
If you feel you are not getting paid enough, then all you need to do is write to company A and tell them you are raising your rates in 30 days. They’ll either tell you to take a hike or they’ll accept.
Everyone raises their prices, even if it’s just to keep in line with inflation. You shouldn’t worry about losing cheap clients who don’t appreciate your improved skills - just gives you more time to find clients willing to pay for your skills.
Oh and as the poster before mentioned, if you are a freelancer/consultant/contractor etc, you don’t ask for a raise - you are NOT an employee, you are an independant contractor who has rates/fees/prices. Running a business is alot about your state of mind and how you perceive yourself - if you see yourself as an employee, you’ll never get respected by your clients, and will certainly not get paid the kind of money you should be getting.
I agree. As a freelancer (here in the US anyway) you ARE a business (have fun paying quarterly estimation taxes and filling out Form 1099 with the IRS). If you get locked into a long-term contract with a client who pays you $X per hour, then you have two choices. Tell them you’re going to raise your rates (and run the risk of a breach of contract), or (preferably) include a clause in your contract stating that said contract wlil last for six months with the option to renew. Obviously, the renewal has to be tied into new contract negotiations. If the client signs a contract that says they are to pay you $X per hour, and nine months down the line, you feel like you’re now worth $Y per hour (or have to raise your rates to meet with inflation and other economic factors), then they won’t be happy if you tell them that you’re raising your rates because your contract with them says they are to pay you $X, not $Y per hour.
Get a term contract (six months should suffice), with the option to renew, and then explicity state that the renewal is not automatic, but must be negotiated, as economic conditions will change, people will get better, and the client may even have additional work for you that he may want to include under the terms of your existing contract.
Wow…these are all great responses. Thanks so much. Best advice was the whole “mentality” issue, where a freelance are not employees, and so they don’t have “raises.”
When you’ve been working as an employee most of your life, swithcing over to the freelancing world definitely requires new things to be learned, and a new way to think about yourself and the work you do. These threads have provided a lot of useful information.
I agree with the others, freelancers don’t have to ask for a raise, they just need to inform their clients about their new rates if you decide you need to raise them.
Surely supply and demand plays a part? If company $x is competing for your time with company $x + 50% then the only way they’ll have the pleasure of your time is if they pay $x + 50% + $1
I too send a letter to my client’s informing them of a rate increase. However, I always word it so that I let them know the percentage of increase they can expect, not a fixed hourly amount.
For example, I never say, I want $XX.00 per hour/job. Every job is different as is the client and I charge that way.
What I mean. I do the web site for a local Anglican Church. I also do it for some coporate clients. I charge them differently. Why? Because one is better able to pay the higher fee; two, one is not as technical as the other.
So the increase will merely be based on what they each pay me now. Percentage wise it is less for the one less able to pay as well.
I don’t charge a set price to everyone…I think that is a sure way to loose business.
One thing I fear though is that your clients get used to your quotes. When you raise your quotes, the client may raise their requirements. Maybe unconsciously but while paying more, they may expect more. Thus you end up starting to feel the pressure that you have not experienced before with this client.
I know it’s only psychological, but it’s subject not only to you, and that’s the difficult part.
Clients dont care how busy you are - only if you can make time for their project.
Im busy … but pay me overtime and Ill do it tonight
Its a sales pitch - ‘last one in’ … no one wants to be the only guy on the ship. When your selling the last seat - thats the incentive. Make room, but give it a premium price tag.
One option to consider is to lock lower-paying clients to a certain commitment in terms of volume. A variation of this approach is to have a sliding scale pricing schedule, something like this:
1-50 hours project: $60 per hour
51-100 hours project: $50 per hour
101+ hours project: $40 per hour
You aren’t really losing revenue by lowering the price, because you don’t have to spend time on finding new business, and ongoing relationships tend to use less of your client management time.
A good way of raising your pricing is by illustrating how your worth to the client has increased (new skills, opportunities etc.).
You can always raise your prices when your overheads become more expensive. Most people will find this sort of raise reasonable. But it would be hard to raise your rates too high with this explanation.
So, perceived value is the best way in my opinion. Make people see that you have become more valuable to them.
But I will say you will probably lose a number of clients if you raise your rates too much too suddenly.
That’s why I don’t believe you should been starting at a rates ridiculous lower than the professional market rates. A lot of people on this forum seem to be undervaluing their work. I’d site the competition areas as proof of this.
Who (in the professional work force) designs a site for only a couple of hundred dollars?
Usually people that live outside of North America, Europe , Japan/parts of China, South Korea, or Australia/New Zealand.
It’s simple economics, really. In some parts of the world, $500 will feed, clothe, educate, transport (either public transportation or gas for the family car) and put a solid roof over the heads of a family of four.
Around here (the Chicago area here in Illinois), $500 isn’t even enough to pay the rent (and I mean for a one bedroom apartment, much less a house or an office). For example, my one bedroom apartment costs me $550 a month, plus gas (electric and water are covered by the landlord).
Boy, I wish I could say the same here in Orlando - I haven’t paid $500/mo for a roof over my head since living in a rented room fifteen years ago. Here, you’d be lucky to find a one-bedroom anything for less than $800/mo, particularly in the current rental market.
Especially factoring in energy costs, you’re living the life. Early this summer, I nearly fainted when I got a $300 power bill for my two-bedroom, 1100 sq. foot apartment.
But do you have drug dealers and gang bangers living next door to you who keep four pit bulls chained in the back yard, who like to shoot at the cops when the police raid their place at 4am?
It’s a tradeoff. To live in comfort here in Aurora, IL you have to be willing to shell out at least $800 a month.
Which, after saving part of my IC income for tax purposes (I’d rather over pay than not pay enough), is something I cannot afford (by itself).
If you think that your work quality has improved substantialy, then you should certainly ask for more money for “future” projects.
You can not re-negotiate rates that you have already agreed on. If you attempt to do that, the client might think that you are trying to get back on your word and extort more money. But for future projects, you should negotiate higher rates. If you did a good job, I am sure that your client may not have a problem paying you higher wages.
I agree with others. And i want to add something more.
Only “firms” are paid enough. People are working with freelancers cause they pay less to freelancers.
If you want to raise your income you should open a firm
