When’s the last time you gave yourself a raise?
Chances are, you’re overdue.
The thing is, when you’re the one responsible for setting your rates – AKA deciding how much you’ll get paid – you must also be the one responsible for raising those rates. I’ll lay out a strategy you can use today to start growing your business, building your margins, and feeling awesome with every new invoice you send.
When’s the last time you gave yourself a raise? Chances are, you’re overdue. 
It requires putting on your grown-up pants, doing a little bit of math, and maybe sending a few heart-pounding emails from time to time, but don’t be too nervous. You’ve totally got this.
When should you raise your rates?
If it’s been more than six months since you last increased your rates, you’re due for a raise.
If it’s been more than a year, you’re long overdue.
You absolutely need to give yourself a raise every year. This not only validates you as a businessperson, but it reflects the growth that you are most certainly doing as a designer. You’ve got another year of experience under your belt, and your compensation should reflect that directly.
I aim to give myself a bump in rates every six months. That might seem crazy, but here’s why I do it that way:
I have two small rate increases per year, which psychologically feels less scary than doing one big one, once per year.
Seeing a steady rate increase feels like a big “win” and keeps me motivated to stretch and grow.
With the steady influx of new clients, it’s easy to implement without having the awkward conversation nobody wants to have. (More on that in a bit.)
It feels good to get a raise!
Plus, I’m the boss and I get to structure my rates however I want.
Same goes for you.
How much should you raise them?
Wouldn’t it be nice if I could answer that question? Truth is, I can’t. But you can!
I structure my rate increases a few different ways. One is to bump up my “base hourly rate” – the number I use to calculate project fees. I’ll usually bump it up about $5 per hour, unless I’m really feeling the pinch, in which case I”ll go up $10 or even more. This is a fairly painless way to work out a raise for yourself if that’s how you price out your work.
If you have more of a package-oriented approach, think about tinkering with the prices by adjusting them up anywhere from three to ten percent. My first napkin-math calculation for package fees is to figure out what a 5% increase would be, and then roll that number up or (sometimes) down to something that sits a little better.
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How to make it painless
Whether you’re due for a rate increase or not, start taking action now. The sooner you start, the more painless it will be and the less likely you’ll be to get painted into the no-money-no-time corner.
This is a simple strategy that freelancers everywhere use, and it’s one I employ regularly:
For every new client you take on, quote the higher rate.
This is a great strategy to use especially when you need to make a big jump quickly, but your client docket isn’t quite full.
So, for example, if you’ve got room for five clients and you’ve got four clients paying you your old rate, quote the next client at your new rate. And then when Client 6 comes along, quote the new rate. If Client 6 accepts, drop one of your low-rate clients (or offer them to stay on and pay you the higher rate, if you have the bandwidth).
Client by client, you’ll roll your way up the pay scale.
My rule of thumb is that if three clients in a row balk at my higher rate, it’s time to take a look at the value I’m offering and see what I need to adjust.
Raising rates on current clients
There are a few times when you can lay the groundwork with clients about your pay increases.
During your initial client intake process, make it clear that you implement rate increases.
When you’re negotiating your client contract, factor in your anticipated pay raise.
If you’ve never mentioned a rate increase, but your role with the client fundamentally changes at some point (like you move to a retainer model, or you’ve been in a maintenance role for a while and the client mentions a new design project coming down the pike), use that opportunity to say that your rates have changed.
There may come a time, though, that you need to raise your rates “out of the blue” on a current client. This is especially true for long-time clients.
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This is when you have to send that heart-pounding email.
It’s not always easy to go to a client and say that you need more money…but if your business is going to keep growing, it’s something you’ll absolutely need to do. You can’t stay stuck at the low rate forever, and there will come a time when that client will have to pay you more or be let go.
If and when that day comes, the best thing you can do is be completely forthright. Another important thing to do is give lots of warning. I try to give my clients about three months’ notice, and I’ll also sometimes offer to book out a certain amount of work at my old rate if it means they’ll stick with me.
Here’s a template to get you started:
Dear Client,
I’ve really enjoyed the [length of time] we’ve been working together. It’s clients like you that have made my business strong and successful, and I’m grateful for the work we’ve done together.
My business has grown a lot since we started working together, and one of the results of that growth is the need for me to increase my rates. My hope is that you’ll see the value of maintaining our partnership, as well as the benefit of working with a designer who’s even more stable and well-established.
Starting on [date], my rates will increase from [current] to [increase]. I know that this may come as a surprise to you, so please let me know if you need more time to meet the new rate and I’ll see what I can do to make it happen.
While I know not all of my clients will be able to take on this new rate, my hope is that you won’t be one of those! That said, please know that if our road ends here, I’ll do whatever is necessary to make the transition smooth on your end.
Please let me know if you have any questions!
All the best,
[your name]
Just remember: this is a good thing! Your business is growing, your income is going up, and you’re getting more great experience under your belt. Way to go!
Ready to grow your business?
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