Why don't you raise him 5-10%? Everything goes up a bit each year. Did you get the referrals from the first client? Does he know the other clients, and would they talk rates?

I didn't get the referrals through the first client, and they don't know each other.

Even if I raise him 10% a year, it would take five years to get him up to the rate that the others are paying, so it has really got to be more than that. Plus, he's driving me just a bit nuts and demanding more time than any of the other clients.

It's my own fault for charging him as little as I did initially, but how do I get out of it?

Be honest about it. Tell him you gave him a tremendous deal for having faith in your abilities, but that if he wishes to retain you then it's time to pay the going rate. He is going to do one of two things......continue to use you and get over it (and most likely put the time you spend there to good use) or he'll go somewhere else. In that case, if youget one new customer who pays twice as much that is also a "win" situation.

I think most people would understand the principle. They might not like it, but would understand.

Operative phrase "continue to use you". Some people will actually offer to pay you more on their own if they know what the going rate is and you aren't charging them that rate. There is no need for either party to get burned, the service provider or the customer. Not everyone tries to take advantage, as many jerks as their are around there's still plenty who try to be decent as well.

Ron_B, I think you're offering some good advice, but I'm not really sure what it is. What do you think I should say to him?

Calliope, thank you.

If I raise him to what I'm charging others, it will nearly double his fee. Should I do it in two separate increments?

Simply say "Due to the demand for my services and increased travel expenses (gas surcharge, etc.), I am forced to raise my hourly rates. My new rate will be $XX per hour. I hope you feel my services support this increase and I look forward to continuing to provide your gardening/maintenance needs".

I raise my rates frequently, usually in response to heavy client volume (tends to weed out the less reliable/more difficult clients), but the increase in gas prices is a major factor for this season's increase.

The thing is more often than not a person new to the business drastically undercharges. I understand that and can empathise and am not saying that they shouldn't. It's just that they don't quite have a handle on the hidden expenses, nor often realise that sometimes perfectly good material they use gets murdered by the aftercare of their clients, but they still have to have a large enough profit margin to replace it.