Who should not raise their rates in January?
Start there, because a December review that cannot answer it is not a review. Do not raise a rate that was set recently and correctly. Do not raise a client whose scope has quietly shrunk to match an old price. And do not announce any increase — to anyone — before the per-client audit below is done, because an increase sized from a feeling will be negotiated from a feeling, and feelings lose. The stop line for this whole exercise: if a client is unprofitable at a correctly priced rate, unwilling to accept either the new rate or a reduced scope, and occupies capacity that better work is waiting for, the honest outcome of the review is an exit, planned politely — not another year at a loss.
There is a reassuring fact behind that line. Losing one or two clients after a well-researched increase can mean the pricing is finally targeting the right clients (s1). A review that loses nobody and changes nothing usually means the rates were set too low to matter, or the review never really happened.
Why December, specifically
Rate advice is usually written as if the calendar did not exist. It does. One of the best times to unveil a price increase is around the start of the year, with notice given from early December (s1). December notice does two jobs at once: it respects the client, who gets warning rather than a January surprise, and it lands while the client is still setting next year's plans, before a January invoice at a new rate becomes an argument about a budget that is already closed.
The review itself also belongs on an annual rhythm. Rates should be reviewed annually, with an increase every 12 months (s3). A rate that has not moved in three years has not been stable. It has been falling, in real terms, for three years.
The December audit: one page per client
Before any number is chosen, give each client one page — a worksheet, not an essay — covering five lines:
- Current rate and rate age. What the client pays today, and when that figure was last set. Rate age is the single strongest predictor of how far behind a client is.
- Scope then, scope now. What the original agreement covered, and what the work actually includes today. List every recurring addition that was never priced. Scope drift is unbilled product, given away monthly.
- Real cost to serve. Hours actually spent, including revisions, meetings, administration and chasing — not the hours the original quote assumed. Divide the fee by the real hours before judging the rate.
- Capacity pressure. Whether this client's slot could be sold to new work at the new-client rate. A full book changes the arithmetic: a below-market rate is no longer a discount, it is a displaced sale.
- Risk and friction. Late payment, constant re-scoping, and approval delays are costs. A painless client and a painful client at the same rate are not at the same rate.
What success looks like: every active client has a completed page, every page ends in one of three decisions — standard increase, staged catch-up, or hold with a stated reason — and no client receives a notice whose number cannot be traced back to that page.
Sizing the increase: two published ranges, one decision
Published guidance does not agree on a single figure, and pretending otherwise would be dishonest. One source puts a typical annual increase at 5–10%, with rates reviewed and increased every 12 months (s3). Another describes a typical bump as 10–20%, with a specific instruction for clients far below market: move the new-client rate now and bring existing clients up in steps (s2).
| Audit finding | Sized response | Basis |
|---|---|---|
| Rate reviewed last year; costs and scope broadly stable | Standard annual increase, in the 5–10% range | Annual-increase range from s3 |
| Rate two or more years old, or scope has drifted well past the agreement | Larger bump, in the 10–20% range, with the drift itemised on the audit page | Typical-bump range from s2 |
| Client far below the current new-client rate | Set the new-client rate immediately for new work; bring the existing client up in staged steps | Staged catch-up approach from s2 |
| Client resists any increase | Hold the rate only by reducing scope, timeline or terms — not by discounting | Adjust scope or terms instead of lowering rates, per s3 |
The table is a decision framework, not a menu to average. Pick the row the audit evidence supports. A three-year-old rate with heavy scope drift priced as a routine annual increase leaves most of the correction unmade, and the same review will have to be re-fought next December.
The notice calendar
Work backwards from January. Give notice from early December (s1), so the new rate is known before the new year begins. On retainers, give at least 30 days' notice (s2) — which, counted honestly, also points to early December for a January 1 start. A notice sent on December 28 for January 1 is not 30 days of anything except anxiety.
Sequence the notices by audit outcome, not by client size. Staged catch-up clients get the full staircase in writing — this step, the next step, and when — so no single letter carries a shocking number and no step arrives unannounced. Standard-increase clients get a short, plain notice: the new rate, the effective date, and one sentence on what the review covered. No apology, no multi-paragraph justification. An increase that needed five paragraphs of defence was probably sized from a feeling after all.
The lock-in offer, and the clause that ends this fight
There is one softener worth using, because it helps both sides. Offer current clients the old price for a period if they buy in advance (s1). Prepayment at the old rate gives the client a genuine saving, gives the business cash in December, and quietly sorts clients by commitment — the ones who prepay are rarely the ones the audit flagged.
Then fix the system that made December hard. Every new agreement should state that rates are reviewed annually, so next year's increase is a procedure the client agreed to at onboarding, not a fresh negotiation invented each winter. Pair that clause with this December's audit pages, kept on file, and next year's review starts at sizing — not at archaeology.
— Sterling Cole, Money Writer — Earning Desk