Saturday, November 28, 2009
Could You Raise Your Rates?
Stepcase Lifehack: "Let’s get real: when you work on an hourly basis, there are two ways to increase income: raise your rates or increase the number of working hours. I’m assuming you don’t really want to spend more time working, so let’s talk about something that a lot of people don’t like talking about: raising your rates. Raising your rates is a way to increase your business income that is often difficult for people to face, and there are many reasons why."
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4 comments:
I think this is a great basis for freelancers to look at if they are in the spot where they aren't sure if they need to raise their rates. It depends on the business that you are in, but hourly rates can be detrimental...after thinking about it, the idea of a "package" deal is more enticing than just an hourly rate. It would be interesting to see if there are any more articles or books that delve deeper into this subject.
I agree that the concept of "packaging" is interesting and may even help eliminate some of the fear or reservations on part of a consumer. When investing money in a project that has an hourly component, it can be scary not knowing how many hours it will actually take and thus how much it will actually cost. In theatre it is nearly impossible to avoid hourly rates for professional unionized employees, but in a more strictly business model I can see this being successful.
Hourly rates aren't really that great for freelancers to do business with. I have known a lot of people who would go to people that had a charge-per-project rate. Also, the packaging thing helps to bring people in for future times but, maybe not so much for that particular instant. It seem like a good idea though to recommend more "soul-searching" when confronting this question.
The second point mentioned in the article is the most important. By not charging by the hour (instead say that 1 of item x costs y dollars), it is a lot easier to change rates, especially if you're doing work that varies a lot from job to job. When working on scenery, a lot of the "packaging" can happen easily, since we do estimates based on the set pieces being built. Although that can have an hourly component for labor, just as significant are the materials costs, and since those will rise with inflation, you can use those as a guide to keep labor rates in line.
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