top of page
  • Writer's pictureJoseph Blogna

When is the right time to increase prices?

The rising cost of living has hit many small businesses hard. Increased wages, supplies and materials and transportation costs can quickly deteriorate your profit margins.

Experienced business adviser, Steve McLaren, has some insights about the right and wrong time to raise your prices.

Questions to ask yourself when increasing prices:

  • Are you struggling to keep up with demand?

  • Have you recently received media coverage that has dramatically increased your customer base?

  • Have your operating costs increased?

  • Do you have, or are you trying to develop, an upscale image?

  • Has it been a while since your last price increase?

If the answer is yes to any of these questions, it's time to consider charging more for what you sell

So if you decide to increase your prices, what is the best way to go about it?

  • Add free features: For example, offer free delivery

  • Bundle your products and services: For example, a Hairdresser might bundle a haircut and treatment for a higher fee

  • Add new products and services: For Example, a cupcake bakery might announce the addition of cookies, cakes and breakfast pastries to the menu, and update cupcake prices at the same time

However, increasing prices when you have recently lost a considerable number of customers may have a negative affect on your business.

It is important to make sure you have your house in order before increasing prices. make sure customer complaints are addressed and the increase has been communicated to customers.

When communicating your price increase make sure:

  1. Be clear and confident about your prices

  2. Update your sales and promotional materials

  3. Give your customers notice in advance

  4. Consider the best way to contact your customers

  5. Be prepared for questions

  6. Make sure your team members know the details

The Small Business Development Corporation has some great resources to help business owners.

13 views0 comments


bottom of page