Your rates next year

[GreGorGy]

For those who are independently operating their own income - I mean, self-employed but others may have insights too.

Currently, my rate is R400/hr. Next year promises to be difficult, long and expensive. Ordinarily, I have gone 10% rounded up but this year I am tempted to mark up by R100 to 500 - 25%.

Reasons include etolling (whether we register or not, this could be a real expense in producing off-site income) and skewed inflation rates (real vs the crap that is published).

Question: if you are in a similar boat, what is your increase gonna be? Is mine too much (or too little)?

 

[grok]

For those who are independently operating their own income - I mean, self-employed but others may have insights too.

Currently, my rate is R400/hr. Next year promises to be difficult, long and expensive. Ordinarily, I have gone 10% rounded up but this year I am tempted to mark up by R100 to 500 - 25%.

Reasons include etolling (whether we register or not, this could be a real expense in producing off-site income) and skewed inflation rates (real vs the crap that is published).

Question: if you are in a similar boat, what is your increase gonna be? Is mine too much (or too little)?

Depends on what you do really. In my industry for my years of experience current rate between R400-R500, but there's a limit to what clients are prepared to pay.

 

[*Medusa*]

No Harm in raising your rates to what you feel is fair, as companies will negotiate to what they can afford to pay you if they cant afford your rate.

Most of our contractors charge around the R500 mark, with the exception of 2 of them (over R900 p/h).

 

[M3mPh1z]

Very industry specific.

In my case I get a lot or recurring customers, I upped my rate from R650 to R750, if existing customers complain about the increase I might leave them on the 650 mark.

International customers are happy to pay double that which is what I charge them.

You are the best person to judge a fair increase as you know your target market better than us

 

[blunomore]

Depends on what you do for a living.

We negotiate our rate with each new client. If they are long term clients, we would increase our fee by 10% p/a.

 

[GreGorGy]

Thank you everyone for your input - food for thought.

I do IT stuff - all kinds of rubbish from pulling a wire to recovery. I charge a flat rate for the most part. Be it something trivial like replacing an RJ45 or something hectic like server or HD recovery. R400/hr or part thereof. Given runaway inflation in my operating expenses and expected OE increases (e-toll litigation, petrol, etc) I think R500 is more than fair.

 

[Komodo]

In that situation I would only charge R500 for new clients.

If you are honest with yourself, the inflation/etolls etc. are not that rough on a guy pulling R64000 a month before overtime.

Don't piss off your existing client base, they are the source of further business that you can charge at your new rate.

 

[GreGorGy]

In that situation I would only charge R500 for new clients.

If you are honest with yourself, the inflation/etolls etc. are not that rough on a guy pulling R64000 a month before overtime.

Don't piss off your existing client base, they are the source of further business that you can charge at your new rate.

You assume I charge every single minute. The thing is, the clients for whom this rate is intended have not enjoyed much by way of increases. They sat on R350 for 2 years, then R400. But I hear what you are saying - this is the kind of input I need to make sure my thinking is straight. Thank you. R450 acceptable then?

 

[Komodo]

Yea i think thats fair, but not knowing your client base well, it could be alienating the less profitable of them out there!

I'd also look at a way managing the reaction by making it known that every June or whatever there will be a bump by 5%-10% or so. Then you can get clever with building in a scaling pricing model that says that if they take a guarenteed 20+ hours a month from you, then the yearly bump stays lower than it usually would, thereby stabilising your income a bit more by eliminating the flat spots when calls arent coming in all day every day while giving you a yearly increase anyway.

 

[GreGorGy]

Yea i think thats fair, but not knowing your client base well, it could be alienating the less profitable of them out there!

I'd also look at a way managing the reaction by making it known that every June or whatever there will be a bump by 5%-10% or so. Then you can get clever with building in a scaling pricing model that says that if they take a guarenteed 20+ hours a month from you, then the yearly bump stays lower than it usually would, thereby stabilising your income a bit more by eliminating the flat spots when calls arent coming in all day every day while giving you a yearly increase anyway.

That's gold. Pure gold. Because in some instances, this is the exact problem. Thanks a span.

 

[Komodo]

Awesome, it's a pleasure.

The big sell will be a guarenteed service per month, with an SLA and everything. I'd pitch it at the level of "the permanent IT guy that costs you 5% of the monthly cost that still fixes your tech issues within 4-8 business hours" or something along those lines.

Get a few clients signed up for your 20 hour a month "retainer" model, and suddenly more than 60% of your paycheck is guarenteed, and the other 40%+ is ad-hoc business and new clients.