There are many questions as a small business owner that you should be asking yourself. Are you making the right amount of money? How much time are you putting into good results? Are you working hourly or per project? The biggest question of all is when is it the right time to raise your rates?
When is it the right time to raise your rates?
This is definitely a difficult question to address. A huge fear is raising rates could result in losing clients. It’s a challenge that’s worth facing. While it is important for your clients to be on board with the price change, you have to first convince yourself that your services are worth the cost..
How do you change your mindset and overcome fears behind raising rates?
First and foremost, you have to know your customer. Did they come to you for quality work? If they did, raised rates won’t affect them. The customer that is always concerned about price are normally the ones that make your work difficult. Raised rates could get rid of those clients once and for all. It’s important to market your business as valuing quality over quantity.
What are the advantages of raising your rates?
You’ll make more money.
If you have not already done so, take time to write down the amount of work you do versus the amount of money your business receives at the end of the year. It’s surprising to discover how much of your hard work goes without compensation. This is especially true with starter businesses. It’s a huge misconception that as a new business owner, you can’t earn a living. But your time is valuable and you don’t want to work for free.
You’ll earn more respect.
An artist becomes an artist when they’ve sold their first piece. More often than not, they are not breaking the bank with their first item sold. However, that first sold item solidifies them as a professional. Word of mouth and exposure gives this artist more business. His next work of art is higher in price because it is now becoming higher in demand. And the scale continues to expand until they are opening galleries and selling art by bundles. This is how you should think as a business owner.
Be sure to show them your worth.
Oftentimes people think that the more money you spend, the higher the quality. That’s not always the case. And because of this, it should be a priority to show your current and potential customers that your rate boost is worth it for everyone. That being said, your branding, online presence and other services/packages should also get an upgrade.
If you don’t value your product, no one else will!