Fully Booked, Burnt Out, and Underpaid: The Signs You Need to Raise Your Prices

Welcome to the Creative Mind Smart Money Podcast, where we turn financial confusion into creative confidence. I'm Samantha Ek, the keeper and fractional CFO for creative entrepreneurs. Each week, I'm sharing my financial expertise and actionable strategies to help you build a thriving creative business. Plus, you'll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. Because building a successful creative business starts with strong financial foundations. Your next chapter starts now. When is the last time that you raised your prices? And how did that feel? On this question. Last time, I personally, as a business owner, raised my prices, was last year. And I consistently review my clients to see if we do need to raise the prices based on the amount of work and the amount of things that are going on in their business and everything that is happening in their business. So I think there are a lot of creatives who tend to stay at a set price or stay under charging for many, many years because they're scared of not having clients. And of course, when you first start out, you start out with a price in mind and you start it with a price. And then over time, you can raise your prices. And I've seen many of my clients do this where they raise their prices and they're super worried from both services to products. And some of those clients will raise their prices. And all of a sudden, you know, they're making even more sales. I've had it across two product-based services because they are, the reputation is so renowned that raising their prices, people didn't even bad-knight. And then you also have services like, again, people don't bad-knight because they know that you provide a premium service. So they're going to pay you what they know and feel that you are worth. So of course, that's a given. It's not something that we need to be stressed or worried about because it happens, okay? So what are the signs that it's time to start raising your prices? When you start feeling like you are spending too much time on clients, but you are not, you don't necessarily feel like your time is being spent properly. That's when you know it's time to raise your prices. Now when I say that, what I mean by that is usually I tell all my clients that they should be tracking their time. And I'm not saying you should be tracking your time because you need to be like, "Oh my gosh, I spent five hours on that." But you need to be tracking your time to analyze where your time is going and how much of your time is spent on content creation, how much of your time is spent on engagement, how much of your time is spent on bajillion of these different things and these different little things. So you know how much time something takes so that you couldn't appropriately price something because like we said before, you're going to give yourself kind of like ineffective hourly rate. So let's just say, you know, your effective hourly rate is $100 an hour and you spend 15 hours on engagement in a week so you know your engagement needs to cost you know $1,500 or maybe it's in a month so your package needs to at least cost $1,500. If you are realizing that your time spent on this is less than you know the time you would initially calculate it, then you definitely know it's time to start raising your prices or if you're spending more time on working on certain clients, then you know it's time to raise prices specifically for that client not necessarily as a blanket because obviously business is changing evolve. So I can take on a client that starts off with nothing. They start off with very little when we start working together and six months down the road they're at 500 transactions a week and you know that the scope of work has changed drastically from when we started to now and that's what I have to be like, okay, you know I'm doing a lot more work on this client that I need to charge appropriately for them. So obviously there's those signals but there's also a signal feeling burnt out like feeling like you're doing a lot more work than what is your time is worth and being like hmm I feel like I am doing a lot but I'm not getting paid for the amount of work that I'm doing I probably need to raise my prices. If you are fully booked and you don't have any breathing room, it's probably again assigning you need to raise your prices because perhaps you know people are booking you instantly because they are like oh man she's going to go price I'm going to book her right away. That's not necessarily to say that people who are always fully booked have like the best prices they could just provide that premium service and people just want to work with them but sometimes that can be assigned that you do need to raise your prices because nine times out of 10 you know people are going to have an issue especially when you have a premium service. Weak you're pricing not because you know oh my gosh it's too high but because maybe it's out of their budget at that point in time so they might have to come back at a later point in time. Now of course there are the odd person who's like oh my gosh I would never pay that but those just aren't the people you want to work with in the first place right so obviously if you're feeling resentment towards projects or clients you're where you are people and you're like this is not a good feeling I don't like this and you hand off the work and you're like I feel like I was worth more than what I got paid for this project probably sign that you need to raise your prices especially if you feel so proud of a project but you feel like you just didn't get paid for it that's definitely a sign for sure. And obviously you've gained significant experience since you last started so maybe your website designer and you've now built 30 different websites and like you know when you first started your websites weren't as great but now you're just getting glowing compliments you know every time you build a website everyone's like oh my gosh that was like the most amazing thing I've ever seen like I can't believe that is even a thing then of course that's definitely a sign that you are ready to raise your prices because you know you're worth more people see that they see the skill that you have to your worth more and as your experience grows and as your reputation grows of course you know there is a ceiling obviously you don't just want to keep charging more and more and more because you know there's a point in time where people are just gonna be like that's way too high for me but there's definitely place that you want to get to you should have that in mind like I want to get to X amount maybe you have someone that you really admire that is in the same industry as you and you're like they're charging X I'd like to get there or around there now I've told you this before in our pricing episodes but you do not want to price the same just follow someone else's pricing their story and their business is completely different than your business so if you're just following their pricing that doesn't really help you right because you want to be charging with your worth not with their worth you have a completely different worth than what this other person is charging so obviously there's a fear behind raising your prices a lot of people get scared they get worried that if they raise their prices again they're not gonna have clients people want to work with them there's always someone that is going to be willing to pay for a premium service now obviously if you're charging you know 30 thousand dollars there's going to be people who are like but especially when you have good feedback you have good reviews you have everything else like that if people really want to work with you they will find a way to work with you they will find some form some shape some way to work with you whether that means they're saying hey I'm gonna set aside money and I'm gonna contact you next month and we'll start working together or six months down the road they're like hey like we talked six months ago let's start working together the fear is based in reality being scared of you know raising your prices is very real fear it's something that a lot of creatives face every day because I don't want to say there's competition but there is a lot of different service providers out there that provide services but I think that when we have specific people in mind that we are working with that person is more of a likely going to choose you over someone else because you spoke to them and a lot of times nowadays people don't even reach out unless they're sure that they want to work with you they already know enough about your pricing they know enough about this so they want to work with you they know that they want to work with you of course if you're raising a president or current clients there's a fear of losing those clients but I think the thought process there is are they worth your time per one thing and are they worth the the emotional stress for like a whole year I had to quarterly clients and I wanted to start switching everybody to monthly I was like quarterly is not good enough getting your books quarterly does not help you understand your business at all I really need to think about getting my clients onto a monthly schedule and I was terrified because obviously if I'm putting people on a monthly schedule they're going to be paying a different rate than if I was working with them quarterly and I was like there's no way that these people are going to want to stay with me I did lose several clients but the clients that stay with me made up for the clients that I lost so there's that theory that you know oh no I'm never going to be able to make up that income but literally the amount of people that I lost I made up for in the clients that stayed and did it cut back my work a lot absolutely but it allowed me to have clients that value me and understand value in the work that I'm doing so it just made me feel all the better right so and of course a lot of my clients when I'm raising my prices they always tell me like you know it's not a matter of if I want to keep working with you it's a matter of how do I make sure that I have enough money to keep working with Samantha so I've had clients for years since I started in 2023 I have I think it is three clients that have been with me since the very beginning since April of 2023 and I have in total, I have 22 clients right now, and I have half of those clients that have been with me since that first year. And then the other half have been with me since 2024, well, not the other half. I would say six or seven. And then I think I had five new clients last year that have stuck with me through last year. So a lot of my clients, they have that longevity. They understand the value. They understand working with me and seeing, you know, the value. And every time I've had to raise my prices with this clients, I've had a pit in my stomach being like, "Oh my gosh, they're going to leave. They're going to leave." Especially the ones that have stayed with me the longest, don't even matten I. They're like, "Yeah, that makes sense. Our businesses changed. We want to stay with you. We're okay with that. We're good for the price change." And literally nobody has batted. And I, over that, when I've been so worried about it. So obviously, of course, there's that imposter syndrome and worrying, am I really worth higher rates? But again, you know what you're worth and you know your story and what's going on in your business. So don't even worry about it. And of course, not knowing if the market will support it. So obviously doing some market research and seeing what other people are at. And if you're higher than them, that's probably a step where you should say, "Why am I higher than them?" Not necessarily don't charge that rate, but you ask yourself, "Why are you higher than them?" But then if you are around the same amount that they are, at least you know that the market will support it, especially if they're booked out all the time. So that's something to think about for sure is just doing some research into that and seeing if the market will support it. Because obviously if you are charging $5,000 above with the average person charges, that probably going to have a little bit more of a difficult time finding clients. But obviously you're going to get clients that 100% will work with you, but you might have a harder time than say someone who's charging $5,000 less. That doesn't mean don't charge it. It just means like think about why you're worth it and use that in your messaging and everything on depth to justify why you're worth that pricing, right? So keeping your rates really low over time is just going to cause you to have burnout. It's going to cause you to not be able to grow your business because you're staying consistently at the same price. Now if that price is supporting your business and you're like, "I don't need anymore." Absolutely. There's no reason to ever change your pricing and I feel like that's good. But if you ever feel like burnt out or like you're not getting enough for your time, again, you'll know when you're ready to raise your prices. And again, that's when you want to think of your pricing as a profitability lover, not just a number. So obviously, you know, you could just say, "Okay, $500, but there's a lot of things that change in your business over time, right?" You gain software, you gain clients, you gain employees, you gain contractors, whatever that is. Now all of that needs to start being factored into pricing and start being factored into your profitability. Because if you start calculating the time that your contractors are spending and the time that you're spending on software and everything I've done, you're realizing, "Oh my gosh, I lost $300 on this project." Because if my software costs on my contractor, I need to raise my prices. It's going to give you a very clearly defined idea of what your prices need to be in order to support not just you in your business, but to support your contractors and to support your software costs and everything else like that. So obviously, if your clients at higher rates is going to equal the same or more revenue with less stress. Similar to what I just said, "Did I have less clients when I raised my prices?" Yes, but it allowed for less stress for me and allowed me to really refine the amount of work that I was doing on the clients at state and the clients at state at those higher rates. Obviously, it freed up my time to do better work because I had less clients. I was able to hone my skills and do better work for those clients than having 30, 40 clients that I was spreading my work out to. And for me personally, I've always thought about what my limit is because I don't know if I want to grow beyond myself. So I'm like, 30 clients, probably the maximum that I can handle alone. And I don't think I'd go above that. Would I still advertise? Yes, but I would not go above those third clients. And obviously, having a lower rate is going to attract the wrong type of client. So if you are pricing yourself just to be as low as possible because you want a bajillion clients, it's not going to attract the type of people that you actually want to work with because people are just going to look at the price tag and be like, "Wow, that's really fair. I just want to work with them because they're so cheap, not necessarily because they resonate with your messaging." I mean, that's clear red flag right there. If you get on discovery call and someone says, "Yeah, your prices were just really low and that's why I wanted to reach out and work with you." That's probably a red flag, especially if that sends alarm bells into you and being like, "Oh, I don't like that." They said that. If you like that, I mean, great. Again, I don't want to go against the grind and say that doesn't work for everybody. It's different strokes for different folks, right? So everybody has a different opinion in that kind of thing. Personally, I think if someone were to tell me my prices were like super low, I would be like, "Oh, that's not where I want to be. I want to be that premium service, right?" So how do you actually raise your prices? Well, the best way to do it is obviously to start off with your thinking. I think new clients is the first and best way to do it. So raise your prices on your website, wherever you're advertising that, put your prices up there first. Have that set in stone so that anybody new is coming in. Then I would go back and review your old clients. So your clients that are kind of older and look at their profitability. If they are still profitable and you don't see a reason to change those prices and you're like, "Okay, I love that my clients and so loyal to me, I'm not going to raise my prices." Then don't. But giving them advanced notices, a courtesy is very important in saying like, "Hey, here's what's changed in your business over the years. You know, here's what's changed in my business. This is why I need to raise my prices." So I'm sort of an advanced notice that will give them that comfort and that visibility into expecting a price increase. And again, frame it around value, not just the cost of living, but frame it around the value that you're bringing. When I go ahead and I raise my prices and I'm telling my clients, "Hey, like here's what's changing." You know, and I give them options. I say, "Here's the lower price package. Here's the higher price package. This is what's changing. This is what you would lose. If you went with the lower price package, this is what you would gain if you went with the higher price package. That way they clearly know and have to find what they're gaining and what they're losing. But that way your new clients will always get the new rate immediately. So you're going to have that new rate instilled. Anybody that comes into you now is already going to be at that rate. Now you just have to work your way backwards. Realistically, you don't know anyone in explanation for why you're raising your pricing, but it's courtesy, right? It's kindness to tell them, "Hey, like, you know, this is why my price is changing." Also, it shows that you value them. That's a client. It shows that they feel valued because you are saying, but you don't know anyone with justification. Okay. So if you're raising your prices and they're like, um, excuse me, like, why would I ever pay that when I could go and pay X amount? Like, you don't owe them a justification. If they feel that way, they're probably not your best client anyways. Usually your best clients are going to be the ones that are like, "Yeah, I see the value. Great." So, you know, just thinking about it in that sense and in that way is, is very, very important. So if you're scared to make the move with your pricing, I want you to think about not just yourself, but I want you to think about your business as a whole. I want you to think about your team. I want you to think about where you want to go and grow. I want you to think about your profitability. And if you want to be profitable as a business, how do you get to that point? And there's a lot of ways of getting there, but it's not by staying stuck in the same place that you've always been. It's by growing beyond that, right? So what I want you to do this week is take your most recent product, your most recent client and just look at the amount of time or the amount of work that you put into them, factoring your software costs, factoring your contractor employee costs, and then see if you're profitable. And if you're not and you know, you need to raise your prices, start off by raising your prices on your website first, start off by allowing new clients to wait to have your prices raised and then work your way backwards. It'll feel a lot more stressful when you have new clients coming in at that new price point. And then you just have to work your way backwards and let your older clients know, hey, this is why my prices are changing and getting those prices changed over. All right. You guys love this episode. As always, like, get sure to subscribe, bring a friend onto the podcast, let them hear it, let them experience it. I as always, I really do appreciate you guys and I wish you guys the best week ever. Farewell fellow travelers.