While we still have a few more months left in this year, it is the time for you to start thinking about how you can charge more next year.
Be The CEO
I am a firm believer that it is not about WHAT pricing model you use, it’s about HOW you price. I see designers get blinded by the mechanics of what pricing model to use - like how much to markup, if they should charge for this or that, if cost-plus is better than hourly.
You can make money with any pricing model - as long as you are pricing with clarity, transparency, consistency, integrity, and confidence - the model doesn’t matter much because there is no Magic Pricing Model.
What matters is that you set your price and stick to it.
Your pricing model won’t solve the following problems, but clarity, consistency, and confidence will:
Are you giving discounts?
Does your pricing depend on how much money the clients have?
Are you giving hours away? Doing free work?
Are you charging what you’re worth or taking what you can?
Are you sending regular invoices?
Do you allow clients to set your rates?
Your spending longer than allocated (for time or budget)?
You have no idea how long it takes you to complete tasks?
When you eliminate the above problems, you will be able to charge more - or at least make more based on your current pricing model.
Raise Your Rates
The beginning of a new year is a wonderful time to raise your rates. So if you feel like you’ve been undercharging use this opportunity to make your rates current. It can also be used as an opportunity to drum up new business. Ultimately, businesses often worry about raising their rates, but in reality, the concerns are usually more in thought than actual implementation. Meaning - very few people will care.
Unless it states that you can raise rates in your contract, the clients you’re currently working with will stay at the same rates as when they signed with you. (You have a contract, right?) But all new projects will be be under the new (higher) rates and most of them won’t know the difference.
For more information on raising your rates visit this article.
Charge Premium Pricing
Lastly, you may want to get projects with higher budgets and be able to charge premium pricing next year.
Most designers don’t start off right away with huge budgets, but it is something they can work up to. It’s a gradual process of hard work and exposure. It’s about making the right decisions on what projects to take based on where they want to be in the future and not waste time on filler projects that can distract from the ultimate goal. I know that like attracts like, so if you’re doing a lot of filler projects - projects to fill the gap in time or income that aren’t really what you want to be doing - you will continue attracting these types of projects.
You must be selective and strategic around the projects that take.
If you’d like to charge premium pricing, you must have a premium service. Your business has to look uber professional and put together - as do you. Your customer experience must be top-notch. Your potential clients need to be able to see the value that you bring to their project, you are selling an experience and a result, not interior design services. Everything about you and your business should match the idea of “premium”.
For more information on premium pricing visit this article.
A Word of Warning
A word of warning: Some of the advice above is sure to elicit thoughts of “I couldn’t do that” or “Client X would never go for that.” These are limiting beliefs and are holding you back. You can 100% do it. I’ve seen designers who once thought they couldn’t change the way they were pricing their services - but when they give it a try they are shocked that not only did it work, but that their ideal clients didn’t bat an eye. When you present yourself as a professional and confident you CAN.
And sometimes I hear “Client X won’t go for that.” Client X isn’t running your business and they aren’t going to be around forever, you need to do what is right for the whole of your business not Client X. Don’t run your business based on what (you think) one client may or may not do.