Thinking of taking time off this holiday season, but you're worried about the financial impact? Chip Camden says you may want to consider increasing your rates to attract business.
Editor's note: This article was originally published on Nov. 19, 2007.
The nights are getting longer up here in the Great Northwest, signaling the arrival of the dark days of consulting: the holidays. Besides making it much more difficult to coordinate efforts with others, there are simply fewer hours available to work. That might be OK for salaried employees or those on a monthly fixed contract, but for those of us who bill by the hour that means a temporary cut in pay — right at the wrong time of the year. I don't know about you, but we have family coming to visit on Wednesday so I'll be expected to keep my greasy little paws off the keyboard from then until Monday morning. Oh, the withdrawals! The lost receivables! The unread blog posts! I might even fall from the TR Top 100!
But at least it's only for a few days. The last time I took a two-week vacation, nearly a year passed before I fully recovered. That was about 10 years ago. Lately, we limit vacations to a couple of days intersecting a weekend.
One way to find some relief, at least on the income front, is to raise your rates. "But wait," I hear you cry, "won't that also reduce the available work?" Well, you'd think so, but let me tell you a little story about that.
Back when I first started consulting independently, I had no idea what rate to charge. One of my early clients proposed the same rate that they charged their clients for consulting services. It sounded like a lot of money to me at the time (though I failed to take into account all of the costs of being independent) so I said, "Sure." I stayed with that rate as I added other clients, and pretty soon I had so much work that my evenings and weekends were completely billable. Soon after that I began dating my future wife, and I wanted to cut back on work. I raised my rate by almost 40%, hoping to chase off some business — but it had the opposite effect! I was in more demand than ever. Apparently, my higher rate made me appear more credible — if I charged that much, I certainly must know what I was doing, right?
Now, I don't pretend to fully understand the psychology of the matter, nor can I preclude other factors — so as always, your mileage may vary. But you might just want to consider increasing your rates as a way to attract business and stuff your pockets. Then you might not even feel so bad about taking some time off for the holidays.Get weekly consulting tips in your inbox TechRepublic's IT Consultant newsletter, delivered each Monday, offers tips on how to attract customers, build your business, and increase your technical skills in order to get the job done. Automatically sign up today!