According to a recent report, nearly half of all small businesses in the United States raised their prices in August of 2021.
Not only that but 44% of them said they would raise prices again in the near future. If you want to stay in business, you will have to increase your prices to stay afloat in this economy.
Is your small business prepared to raise prices to keep up with inflation and the ever-growing costs of doing business? Here are some ideas to help you stay afloat now and in the coming year:
Let Your Customers Know Beforehand
The biggest thing customers complain about is when prices are raised without their prior knowledge. That is the worst thing you can do with your pricing and with your customers. People expect to pay a certain price for a product or service.
Let them know ahead when and how much you will be increasing your prices for your products or services. Once they have time to reflect on it many will continue to stay in business with you.
They will most likely understand as so many businesses are having to raise prices today since Covid came along.
Try Add-ons to Raise Prices in Your Small Business
Another tactic you can try is to add some add-ons to products and services. That way you can still make up the difference on what you are losing on your costs.
Offer them another type of product or service that would be in addition to what they already use and purchase. Even if the cost is low, it will still add more dollars to your bottom line.
Next, Add Value to Your Products or Services
Another way to soften the rising costs of your business is to add value to your clients when you raise the prices. Everyone loves something for FREE today.
Give them something additional whether it be an extra hour of coaching or a free white paper or an eBook.
Charge More for New Clients in Your Small Business
If you don’t want to lose any clients, you could always charge more for your newer clientele. As you generate new business your prices will be higher on them and not your long-term loyal clientele base.
Of course, be careful if they came through as referrals. However, you can note that you offer more for long-term customers.
Think about that one: So many big businesses offer deals to get new people in the door while not providing anything for long-time customers. That really upsets long-term customers.
It’s less expensive to keep your clients rather than generate a new one by about 5X!
Offer Referral Discounts to Your Small Business
Now, another tactic is to offer referral discounts to clients who bring you, new clients. You could give them a discount for a month or 2.
However, you would not want to discount for a longer-term as prices continue to rise higher for products, shipping, and delivery as well as labor costs.
You may not want to advertise this referral discount but email your clients directly or call them by phone to offer it.
Try Newer Less Costing Products Yourself
For example, you could check out the different payment processor options for small businesses today. You could save money on the processing fees and not have to raise your prices as much!
The same could be done for your tax accountant, billing processor, etc. Go through your budget and see where you can save money too.
Offer Lower Priced Options for Older Customers
Lastly, if you don’t want to lose your older clientele you could offer them some lower-priced products/ services to retain them but not deliver as many products or time in your services.
Give your customers more options to save money but still do business with you.
Conclusion of Raising Prices for Your Small Business
To stay in business, you must make money. You have to take in more than you put out. It’s as simple as that. You started your new business to stay in business and not work for anyone else.
We hope this helps you continue to have a profitable business. We’d love to know any other ideas you have for raising prices today.