Does the thought of raising your rates leave you saying “Uh-uh, no way?” Are you worried that the covid-induced interior design “bubble” may pop? What if you raise your prices and the bubble does burst? These questions contribute to the mindset struggles designers face when considering raising their rates. So how do you determine if you should make a change? In this episode of Wingnut Social, Danielle Hayden shares some exercises that can help you make the decision.
Danielle is a reformed CFO on a mission to help rule-breaking female entrepreneurs understand their numbers to gain confidence to create sustainable profits. She’s the co-owner of Kickstart Accounting, where she helps her clients with bookkeeping, financial analysis, and provides education to help them make informed decisions.
What You’ll Hear On This Episode of Wingnut Social
- [3:22] Mini News Sesh: An algorithm-free Instagram feed?
- [8:20] Learn more about Danielle Hayden
- [15:28] Thinking about raising your rates? Do these exercises.
- [22:50] Determining your take-home pay depends on your goals
- [30:12] It’s time to change your mindset about raising your rates
- [36:47] The What Up Wingnut! Round
- [41:38] Blooper Reel!
Connect with Danielle Hayden
Resources & People Mentioned
Thinking about raising your rates? Do these exercises.
Exercise #1: How much of your time and energy goes into a single project? What are your average operating expenses per month? Multiply the time you spend in your business by your hourly rate. Add your operating expenses to that number. This is your break-even number. Divide that by your number of clients each month. This gives you an idea of whether or not you’re profitable.
Secondly, what are your goals? Is it your goal to outsource parts of your business, such as social media or bookkeeping? Do you want to be hands-on with every project? Or do you want to oversee a team of designers? What will that cost you?
Grab a piece of paper now and add up how many clients you need to take on to hit the numbers you need to reach your goals. You may see that if you don’t raise your rates, you’ll never meet those goals. It’s a clear way to see whether or not you need to raise your prices.
Exercise #2: Danielle recommends that you go into your accounting system and run a P&L report for the last 24 months. Looking at your history helps you determine your average spend per account and what you need to spend to keep your business moving forward. Your history helps determine the steps you take today.
Change your mindset about raising your rates
If you don't want to raise your rates, that’s okay. But think about your goals. What if you can serve fewer clients at a higher price tag and be happier doing it? You may lose a client in the short term but the long-term impact will be worth it. Your mindset will change. The client paying more for your service will value you and your brand.
Darla doubled her rates after she gained some experience which helped her land more clients. Their perception of her value increased with her rates. You don’t have to make a bold move like Darla’s. Figure out what works and what doesn’t, track the numbers, and make an adjustment. There’s no such thing as failure—there is learning and growing. Changing your mindset and changing your rates can be transformative.
Connect With Darla & Wingnut Social
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