So you’ve been thinking about raising your rates for a while, but you’re not sure if you’re ready. Spoiler alert: You are! But if you don’t believe me, here are six signs it’s time to raise your rates and jumpstart your business growth.
6 Signs You Should Raise Your Rates
1. You’re the “cheapest” in your niche.
I know it’s tempting to be the “cheapest” or most affordable service provider in your niche. It songs like a great way to sign clients, right? Wrong! Having lower rates than all of your competitors can actually do more harm than good. Here’s why:
It undercuts your value. When you pay for a cheap service, you expect a cheap service. A client who is looking for the absolute lowest price won’t value you as much as a client who truly invests in you. Your relationship with them will reflect that.
It makes you look inexperienced. Who are you more willing to trust: a hairstylist who charges $5 for a cut or one who charges $50? By charging high-end prices, you send the message that you provide a high-quality service. That automatically creates trust.
It leads to burnout. If you’re the most affordable in your niche, that means you have to hustle twice as hard as your competitors for the same income. Eventually, that will lead to resentment, frustration, and burnout. Better to raise your rates from the get-go and love your business more for it.
2. You’re consistently booked out.
I’ve worked with clients who’ve been booked out for years, have waitlists miles long, and still hesitate to raise their prices. But what do you have to lose?! If you’re consistently booked out, you can afford to raise your prices. Even if a client or two drops off, the added income will make up for it. And if you have a waitlist, you probably should have raised your prices yesterday!
3. You work longer hours than you’d like to.
If you’re anything like me and my clients (and probably 99% of the world), your goal is to work less and make more. The best way to achieve that is to raise your prices.
Consider how many hours you want to work and how much you want to make, and then backwards engineer your hourly rate from there. Chances are, this number is going to be a lot higher than your current rate. If so, it’s time to raise your prices!
4. You can’t afford to outsource yet.
Another way to work less and make more is to outsource. When you hire an employee or contractor, your business gains the capacity for more clients, and therefore more revenue. But of course, outsourcing is an investment. That’s where raising your rates comes in.
The sooner you raise your rates, the sooner you can start saving for outside help. Then, with that help, you can make even more money. Rinse, repeat, and keep scaling your income!
5. Your work has increased in quality.
If you’ve been in business for a while, I’d be willing to bet your work has improved. Maybe you’ve invested in your education, improved your client experience, or decreased your delivery time. Whenever you make a significant improvement to your services, you should make a comparable increase in your prices.
If you’re not sure whether or not your work has increased in quality, ask your long-term clients! Send a request for a testimonial, and include a question about how your work has changed since they signed on with you.
6. You’re reading this blog post. (*wink wink*)
If you’re even starting to dream about raising your prices, it’s time! I find that most business owners, even if they’re hesitant to admit it, know when they should start charging more. The hard part is actually sending the email, scheduling the check-in call, and telling your clients their rates are increasing.
How to Raise Your Rates
If you’re still nervous about raising your rates, here are a few things to keep in mind:
This is part of business ownership. Every business raises their prices as they grow (or at least they should!). It’s a sign your business is evolving.
Your clients want to invest in you. They pay you for a reason. And if they truly value your work, they’ll happily pay you a bit more.
It’s worth it. All the discomfort and nerves will be worth it in the long run when you’re making more, working less, and getting even closer to your goals!
Raising your rates is a mindset shift more than anything else. But if you’re willing to take the leap, you will definitely see the benefits!
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