Starting freelancer career while already having customers

Question

I'm currently studying web development and working as a student trainee in a startup. During my free time I sometimes create and maintain websites for others.

The reward I get for my work is quite similar to pocket money, so not really worth the work I do (even though I get references and the experience).

After my studies I think of starting my freelancer career, but to earn enough money I would need to raise the price by ...a lot.

What would be the best way to go away from the "pocket money" and raise the prices and preventing the current "customers" to move on to another developer/agency?

Answer 1

If you aren't already charging market value it's highly unlikely you'll retain any existing customers once you do start charging market value.

Chances are, clients you currently have are clients because you aren't charging them what anyone else would charge. If you raise your pricing to more standard rates, these clients will most often just go find someone else that undervalues their work rather than paying you more.

Cheap clients tend to stay cheap clients... and don't really have much loyalty towards workers.

The best way for you to make more money is to find new clients at your new pricing.

The fact of the matter is that whether working full time, part time, or just spare time, your hourly rate shouldn't be any different. The difference is in the amount of hours you work.

All that being posted, some hourly discount due to turnaround speed may be appropriate. So I can see why someone would charge a lower rate to make up for the fact that they need two weeks working in their spare time, as opposed to 3-4 days if they were working full time. Still best to find new clients rather than trying to retain the lower paying clients. Raise your rates.. if they stick around great... but expect them to leave.

Answer 2

Agree with the answer stating that you will not be able to retain current clients. Once you've 'anchored' your price level, it turns out to be virtually impossible to change it.

In addition, new freelancers tend to undervalue their own services, because they find the work relatively straight-forward and therefore don't charge by the value it gives the client, which often is considerably higher than the effort of the freelancer.

If it suits you, perhaps find a commercial partner - a salesman - who will price the product according to the perceived value to the client. If you find someone really good, they might also be more ambitious and go after customers you never would have.

Having said that, finding this commercial partner is quite difficult. I tried for a long time and ultimately failed. However, if your ambition ultimately is to create a 'real' company, sooner or later you'll need to find partners. May as well start now.

Answer 3

Agree with others. Your current rate is attracting certain clients-more likely than not the ones that are price sensitive. They also probably aren't demanding. Both will change when you adjust your rate. Clients that will pay market correct will insist on higher quality and will be willing to fire you if you don't produce it. So be sure to consider the quality of your work and bake that and a certain quality standard into your new pricing and then deliver the results. Good luck