Is it time you increased your rates?
This is something I have had to deal with today so I thought it would be a good idea to write about it while it’s fresh in my mind. Having only just started out as a virtual assistant in August 2011 (in the UK) I initially started using PeoplePerHour to find clients. I was very lucky because I was awarded my first job within a week.
I started work for this client under the impression the contract was due to last 6 weeks while they found an in-house solution. Well I’ve been working with them for 6 months now and even though it’s still bringing me in some money, the time it takes throughout my working week is getting more inconvenient trying to fit it around my other clients.
Today I have emailed the contact within the company explaining that I am happy to continue with the work, but I will have to increase my rate from 1st February. Having received some documentation from the RSI (Régime Social des Indépendants) this morning, I now know that I have to pay 21.3% of my income (even if I only earn 1 Euro) in taxes. This is probably much like the UK, but if you earn less than £7k you don’t pay any tax, in France that’s not the case.
So I needed to take action, and now having informed this client that my rate will need to be increased I could quite possibly lose them altogether. But it’s a risk I had to take, the more time I spend on low paying clients, the less time I have to concentrate on finding full paying clients.
When I first started out I spent a lot of time on PPH looking for work, but now I concentrate more on finding clients in different ways, such as through social media and LinkedIn. These freelancer websites are good in a way, but the low rates of pay for some of the work can be really depressing. I check the site once a day now and only bid on work if the rate is comparable to my hourly rate.
When is a good time to increase your rates?
I think it’s all down to your personal situation. During a recent webinar with Ace Inspire last week, Antonia gave a great example of how to work out your hourly rate. Think about how much you would like to earn each month and then how many hours per week you would like to work. If you’d like to earn £3,000 per month but you only want to work 10 hours per week (40 hours per month), your hourly rate would be £75. It’s an easy calculation but something many of us probably haven’t sat down and worked out properly. This should give you a good idea whether you should be increasing your rates.
I hope I have given you some food for thought about rates and when you should increase them, I’d love to hear any further comments on this subject, is there something I haven’t thought about?