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Now, current clients are ones you are likely most afraid of. What will they say? Will they never want to work with you again? The best time to raise prices is at beginning of year, either calendar or fiscal, or at beginning of a new contract with an existing client. Never try to negotiate a price increase in middle of a project. If a project is taking significantly more hours than you quoted for a reason out of your control or it’s directly within client's control, you can consider discussing it with them. However, if you want to be sure to maintain positive client relationships, you may choose to learn your lesson from this one and protect yourself with a contract that outlines contingencies such as that going forward. But, in most cases, never try to increase your hourly rate on a client in middle of a project. This sends a message that will likely get you response you most fear - that you are a money-hungry so-and-so who only cares about him or her self.
Instead, wait until a natural beginning, ending, or transition period to communicate your price increase. One way to do it is to send your client a beginning of year letter that expresses your appreciation of their business in prior year, outlines any policy changes you've made for coming year, communicates your price increase, and states your anticipated pleasure of working with them in coming year. If you are raising prices at end of one project and are about to bid on another project with same client, during your discussions tell them you have raised your hourly or project rate and hope they still find it to be competitive and will continue to work with you since you've really enjoyed collaborating with them.
Notice you did not hear me guarantee you will keep every single one of your current clients. Like you, your clients make purchasing decisions based on a variety of factors, each person weighing each of factors differently. If you've been lowest price available in your field, you've no doubt attracted clients who make decisions based mainly on price. Increasing your price so you are no longer "the low-price guy", may send them packing. So be it. Once you raise your prices to a respectable rate you can profit from, that’s competitive and fair, you will begin to attract clients who will pay it. It's all about positioning. You can position your company as low-price guy, top-of-the-line guy, or value guy (middle of road price with a quality service).
The lesson here ... it’s your business and your revenues are what you make them.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Kimberly Stevens is a business coach who works with business owners who want it all – a joyful personal life and a meaningful and profitable business. Her web site http://www.askthebizcoach.com offers weekly TeleTalks on business topics, a discussion board, business assessments tools, and an ezine addressing business challenges from a more personal angle.
Kimberly Stevens is a business coach who works with business owners who want it all – a joyful personal life and a meaningful and profitable business. Her web site http://www.askthebizcoach.com offers weekly TeleTalks on business topics, a discussion board, business assessments tools, and an ezine addressing business challenges from a more personal angle.