When I first started bookkeeping I had no idea what to charge. I got my first independent client through word of mouth and I picked an hourly rate that felt like a lot based on how much I was earning at my other jobs. I didn’t research the industry standard or consider that I lived in one of the most expensive cities in the US- San Francisco.
I literally pulled an number out of thin air and decided that would be my rate.
The growth of my bookkeeping business was entirely word of mouth. I didn’t advertise or go to networking events. I just did a really good job and added extra services to my monthly work for free. I didn’t, and still don’t, have a website to advertise my bookkeeping business.
Word of mouth referrals allowed me to grow my business without any investment but they also kept me stuck in my original rate because I never felt compelled examine it. Business was flowing in. My clients repeatedly told me I was the best investment they made for their business. What else did I need to do?
As my practice grew I felt like I was working all the time. And while I worked all the time, I still wasn’t making enough money. How could I work so much and still have barely enough to get by every month? What was holding me back?
It was my rate.
Around the same time I was feeling overworked and broke I took over another bookkeeper’s practice and asked about her rate. It was double mine. We had the same experience, worked with the same types of clients, and our styles and workflow were almost identical. So why was my rate so low? What made my service half as valuable as hers? Nothing.
It was soooooooo time for me to raise my rate.
The thing about raising my rate was that I needed to raise it a lot to feel like I was being paid even close to what I wanted and needed. Not only was I underpaid for my skill, I wasn’t making a sustainable income. I used a spreadsheet to play around with income scenarios until I found a rate that felt sustainable to me, but also aligned with my integrity with my clients.
The average increase was going to be $20/hr for each client. I work with clients on a monthly basis and some client I spend up to 6 hours a month on their books. I was asking some clients to pay me an additional $1,500 year. Enter fear. Enter doubt. Enter what on earth am I doing?!
But it had to be done and I wanted to be realistic about the possible outcomes. I braced myself to lose two clients and decided, even if I lost those clients, raising my rates would still be worth it.
I drafted an increase letter to my clients and included the following:
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] A thank you for their trust in my with their finances
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] My new rate and the date it will go into effect
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] A brief note (not an explanation or apology!) about how I arrived at my rate- through industry research and my years of experience
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] A note about my gratitude for their referrals
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] Transparency about my new client rate (which was higher than their rate) and a request to quote this rate when referring me and not their ‘grandfathered’ rate
[wc_fa icon=”arrow-circle-right” margin_left=”” margin_right=””][/wc_fa] An invitation to contact me if they had questions or concerns
Pressing send was the hardest part. Here I was putting my business on the line in service of what I truly needed. I sat in front of the first letter for 30 minutes before pressing send. Once the first one was off each one got easier and easier.
If pressing send was the hardest part, then waiting for a response was the worst. I wanted to know but I didn’t. I checked my email constantly that day with the worst case scenarios running through my head. Then I got my first response. It was:
“That’s great! I’m so glad that you’ve increased your rate! I so appreciate you giving me a special rate.
It’s my great pleasure to refer you – you are a joy to work with and somehow you manage to deal with my terror of addressing anything financial. You’ve also given me the perspective to make business choices that have increased my profits.”
Yes, that is a real email from one of my clients after I asked her to pay me more money. And there were more like it. HALF of my clients wrote me with a similar message- appreciation for my service, gratitude for my generosity with the grandfathered rate, and happiness for me getting what I needed.
Not a single client complained about paying me more and I didn’t lose any clients. After I increased my rate, my referrals shot up and within 6 months my practice was full.
There was a financial benefit to raising my rates but strengthening my relationship with my clients was truly what I valued most.
Having a service based business, I see myself in a support role in my client’s business. The process of raising my rates showed me that my clients want to support me too. The river flows two ways.Raising my rates showed me that my clients want to support me too. The river flows two ways. Click To Tweet
Noticing this made me want to be ever better for my clients, which meant I fine-tuned some of my processes to make them more powerful. As my services improve, my client’s appreciation for my work expands.
I feel valued (both financially and emotionally) in my work, which makes me want to do it, and do it well. And my clients receive a service that is beneficial to their businesses and lives.
It’s a beautiful cycle that isn’t at the expense of anyone, but rather in service of each other.
P.S. Several of my clients have requested a template of the my rate increase letter to use for their businesses because they had such a positive response to mine. I’ve included it here for you to use too!!
Print out the Increase Notification Letter and fill it in. Don’t worry about sending it just yet. Hang it up in your office and look and it every day. What shifts when you think about raising your rate everyday? What becomes possible?
Raise Your Rates
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