Business Owners Who Are Afraid to Raise Prices!
Sometimes, you need to raise your prices. This is a scary prospect for many business owners. You don’t want to lose customers to less expensive competition. However, if your business isn’t making enough money, you’re going to have a hard time selling it. In order to keep up with the market and stay competitive, you need to adjust your prices from time to time, but how will you know when the time is right?
How to Tell When it’s Time to Raise Prices
- It’s been a while. If your prices have been stagnant for years, you may consider raising the price tag. While it is ill advised to make up for lost time with a giant price hike, if it’s been a long time, you may consider a schedule for raising prices in small increments.
- Business costs are going up. Perhaps your rent is increasing. Maybe your employees need raises. Wherever your business costs are going up, you shouldn’t take a hit in the form of a decreased profit.
- Demand is increasing. If you have more work than you can handle, this is a strong indicator that you’re poised to raise rates. If it results in you making more money for doing less work, upping the costs is a good thing.
- The market allows for it. If you’re a successful business owner, you are keeping your eye on the market. If your services or products are in high demand and the market can handle a price increase, it may be time to kick rates up a notch.
Increase Rates Without Upsetting Customers
The main cause for anxiety about raising prices is the fear that you will lose customers. Be honest with your clients and, in some cases, let them know you’re increasing prices. Be prepared to explain your reasoning behind the increase, and you may be surprised at how understanding patrons are.
Charging the correct price for your products or services is essential to running a successful business that is attractive to prospective buyers. If you need more help preparing your business for sale, give The Bridlebrook Group a call.