10 Ways to Give Yourself a Raise When You're Self Employed
How do you give yourself a raise when you’re self-employed? It’s not as easy as transferring more money from your business bank account to your personal one (though we can dream!).
That money has to come from somewhere – if you can’t afford to pay yourself more money, how can you go about giving yourself a raise?
From building your network to selling yourself on your skills, here’s how 10 freelancers and small business owners answer the question, “How can freelancers and solopreneurs give themselves a raise?”
Build on Your Network
Connecting with other professionals in your field can not only help you gain more clients and referrals, but also allow you to charge higher rates.
Try joining online groups or attending events that bring people in your industry together and start putting yourself out there as an expert in your field. Take advantage of every opportunity to make yourself known and remembered, which should help boost your rates when it's time for a raise.
Lorien Strydom, Executive Country Manager, Financer.com
Increase Your Rates
It can be intimidating to ask for more money, but if you can demonstrate the value you bring to the table, you can justify a higher rate. Start by researching what other freelancers in your field are charging, and then adjust your rates accordingly. You should also consider the cost of living in your area and the amount of time you’re spending on each project.
Also, don't be afraid to negotiate with your clients. If you can show them why your services are worth the higher rate, they may be willing to pay it.
Carly Hill, Operations Manager, Virtual Holiday Party
Treat Your Business Like a Real Company
I think a lot of people who are just starting out in their own business struggle with treating it like a real company. They're used to being a cog at a larger company, where they have a boss who takes care of everything. But when you're running your own show, there's no one else to do those things for you—it all falls on your shoulders.
I've found that if I treat my business like an actual company and make sure every aspect of it has its own metrics and goals and KPIs, then I feel like I'm getting paid more than ever before.
Rengie Wisper, Marketing Manager, CPS Test
Prioritize Long-Term Work
Freelancers can give themselves a raise by seeking out long-term work as a means to show their worth and not have to constantly hustle to find work and defend their value. Long-term work allows freelancers to build relationships with clients and demonstrate their commitment to the project. This can result in more money for the freelancer as clients are more likely to pay a premium for a longer-term commitment.
Additionally, long-term work can provide freelancers with the opportunity to showcase their skills and abilities over the course of the project, which can lead to more money for the freelancer in the form of bonuses or additional fees. Finally, long-term work can provide freelancers with the opportunity to develop a reputation as a reliable and dependable professional, which can result in more money for the freelancer in the form of referrals and repeat business.
Michael Alexis, CEO, Tiny Campfire
Duplicate Yourself to Reduce Active Participation
With an impending recession, slamming rate hikes on your client will increase their financial burden. There’s a better way to raise your rates: source top-class subordinates that closely mirror your capacity and delegate to them accordingly. This frees up your time to increase your client pool and effectively raise your remuneration for the now-reduced hours you actively spend on tasks.
Let’s assume you charge $50/hr. So instead of asking your clients for $80/hr, you can invest in contractors who deliver close to your levels at $30/hr. Consequently, instead of doing the tasks end-to-end, you simply put the finishing touches. What’s important is that the quality must not suffer. With more time on your hand, you can source more clients and delegate accordingly. The larger client pool increases your net earnings after paying the contractors actively doing the job. Ultimately, your hourly rates increase without each client paying more.
Establish Multiple Sources of Income
The mark of a truly successful freelancer or solopreneur is the ability to generate income in a multitude of ways from multiple sources. For example, you could use affiliate links on your website or start selling advertising. There are numerous ways to generate passive income through your website. The more sources you have to exploit, the easier it’ll be to generate wealth and effectively give yourself a raise.
Nick Oberheiden, Founder & Attorney, Oberheiden P.C.
Automate Tasks with Apps
Automating tasks with apps can be a great way to give yourself an effective and instantaneous pay raise as a solopreneur. Automation apps can help increase efficiency, reduce the time it takes to complete mundane or repetitive tasks, or allow you to do multiple tasks at once—all of which increase your productivity and thus, your bottom line.
Automation can provide quick and easy relief from tedious work that allows you to focus on higher-value outputs. Automating with apps can be a cost-effective solution that gives you more control over your business, productivity and profits.
Ludovic Chung-Sao, Lead Engineer & Founder, Zen Soundproof
Set Small Goals
Working for yourself gives a sense of freedom and many benefits. When you’re in a company, your growth depends on you and the company’s growth. You get promotions from the company. But when you are working as a freelancer, how would you give yourself a raise?
Make small goals. I believe this is an effective way for the solopreneurs to give themselves a raise. Identify the minimum income goal each month. Once you reach one goal, prepare for the next one. Meanwhile, look for clients who can match your financial expectations. It would be possible when you move to achieve your monthly goals consistently as this way you can improve your skills as well. In these goals, you should include your marketing goals, financial goals, skill development goals, and others that you think are crucial for a raise.
Sanjay Singh, Founder and CEO, Technource
Provide More Value and Speak with Your Clients
If you want to get a raise, one of the best things you can do for yourself is to provide clients with more value and make sure your clients know it. I tell my clients what I'm worth by comparing market prices, and how much I could be charging.
You can't expect your employer to pay you more unless you're providing them with something of value. When it comes to giving yourself a raise, that means providing clients something new they can also use—a new feature or process, or even just a better solution.
Jennie Miller, Co-Founder, Midss
Sell Yourself on Your Skills
If you're apprehensive about giving yourself a raise, then taking stock of your efforts might be the best way to get over your doubts. As a freelancer or solopreneur, you are the most important factor in acknowledging the value of your skills. If you don't believe that you've earned your raise, then it’ll be that much harder to accept giving it to yourself over investing it back into your business.
Try taking stock of your work year, how your skills have improved, any new skills or efforts that you've brought to your business. If you're putting greater time and effort into your job, then you should be getting more compensation, just as you'd expect if you were working for a standard employer. You shouldn't fear giving yourself a raise, especially when you're adding value to your business with your efforts.
Max Ade, CEO, Pickleheads