The number on the proposal didn’t feel right.
Wendy had been staring at it for twenty minutes — a fresh website build for a returning client, scoped out in detail, every deliverable listed. The total at the bottom was the same rate she’d been charging for two years. And the more she looked at it, the more obvious it became: she was about to undersell the same work she’d done a dozen times this year, only better, faster, and with a stronger team behind her.
She closed the proposal without sending it.
“I think it’s time,” she said out loud, to no one in particular. Her dog, half-asleep on the office rug, didn’t disagree.
Why mid-year? Why not wait?
For years, Wendy had treated price increases the way she treated dentist appointments — something to put off until January, and then quietly avoid in January, too. She’d tell herself she’d “do it with the new fiscal year” or “wait until the next big launch.” Meanwhile, her costs kept climbing. Software subscriptions, contractor rates, even the coffee in the studio kitchen — everything had gone up except what she charged.
The shift came when her advisor at Number Crunchers® pulled up her year-to-date profit margin and asked a simple question: “If you keep these rates for another six months, where does this leave you in December?”
The answer wasn’t pretty. Margins were thinner than they’d been the year before, even though revenue was up. The agency was busier and less profitable — the classic mid-stage trap.
“Waiting for January is just choosing to leave money on the table for six more months,” her advisor said. “Prices can change whenever the value does.”
That reframe landed. Wendy stopped thinking of pricing as an annual event and started treating it as a financial decision she could make whenever the numbers supported it.
Wendy’s tested formula
Wendy didn’t invent something fancy. She built a checklist she could actually run in an afternoon — the kind of thing you can sit down with, a coffee, and your last six months of financials.
| Wendy’s mid-year pricing review:
• Pull the last six months of project P&L. What’s the actual margin per project type — not the one in the proposal? • Identify any project category running below your target margin. Those are the candidates for a rate change. • Add up the year-over-year increase in your real costs (software, contractors, salaries, benefits). • Calculate the minimum rate increase that brings margins back to target — then add 5 to 10 percent for breathing room. • Decide on an effective date that gives existing clients fair notice (Wendy uses 30 to 60 days). • Draft the client message before you second-guess yourself out of it. |
What surprised her most was step one. She’d assumed her highest-revenue projects were her best ones. They weren’t. A couple of “prestige” clients were quietly the lowest-margin work on her books, eating up senior team hours that could’ve gone toward more profitable accounts.
The conversation she dreaded — and how it actually went
The part Wendy had been avoiding wasn’t the math. It was telling clients.
She drafted the email three times. The first version apologized too much. The second over-explained. The third — the one she finally sent — was short, direct, and respectful:
“Our rates are increasing effective September 1. Current projects and any contracts signed before that date are locked in at existing pricing. We’ve loved working with you and look forward to continuing — here’s what the new rates look like.”
No grovelling. No long justification. Just facts and a clear date.
The result? Out of fourteen active and recent clients, twelve responded with some version of “totally understand, see you in September.” One asked thoughtful questions about scope and signed a new retainer at the higher rate the same week. One quietly drifted away — a client Wendy had been considering letting go anyway.
“The clients who value your work don’t flinch at a rate increase,” she told her team later. “They flinch when the work slips. Keep doing great work, and the pricing follows.”
What the increase actually paid for
Wendy didn’t pocket the difference. She wrote out, in plain language, what the higher rates were funding:
- A junior developer she’d been wanting to bring on for nine months.
- A small QA process that meant fewer late-night fixes after launch.
- Quarterly profit distributions she’d been promising herself since the agency hit six figures.
- A buffer in her business account that didn’t evaporate the moment a client paid late.
Three months in, the agency wasn’t just more profitable — it was calmer. The team noticed. Wendy noticed. And the work, freed from the quiet pressure of underpricing, got better.
What Wendy would tell her past self
“Stop waiting for permission. Your costs go up every month. Your rates don’t have to wait for a calendar to catch up.”
Mid-year price increases used to feel like a confession. Now they feel like maintenance — a regular part of running an agency that intends to still be here in five years.
Wendy’s takeaways
- Pricing is a financial decision, not an annual ritual. Change it when the numbers say so.
- Revenue without margin is just busy work. Always check profit per project type, not just top-line.
- Give clients 30 to 60 days’ notice and a short, direct message. The drama lives in your head, not in their inbox.
- Use the increase to fund something specific — a hire, a process, a buffer. Make it visible to yourself.
- The right clients stay. The wrong ones self-select out. Both outcomes are good.
Ready to run your own mid-year pricing review?
Number Crunchers® helps digital agency owners like Wendy turn their numbers into clear, confident decisions — about pricing, hiring, taxes, and everything in between. If you’re not sure whether your rates still match the value you deliver, that’s exactly the kind of conversation a quick advisory session can solve.
Start Your Financial Journey with Number Crunchers® today, and let’s make sure your pricing is working as hard as you are.