by Emily Farrar
Learning when and how to increase prices is one of the most important strategic moves you can make as a small business owner. As your business grows and your costs increase, it makes sense that you should be charging clients more for your services.
But how can you raise your prices without sending clients running for the door? And why would clients pay more for the same services that, up until now, you’ve been providing at a lower rate?
It’s totally possible to increase prices without losing clients, but it’s important that your timing is right, and that the situation is handled with as much finesse as possible.
Give them notice
Think of price increases in the same way as giving notice when leaving a job. While two weeks notice is standard, you’d probably want to give your boss and coworkers quite a bit more time to prepare and find someone new.
It’s the same with price increases for your small business. Clients should have at least one month – ideally more – to get ready for the change, both financially and mentally.
When considering how to increase prices, it’s important that your clients know exactly how the new price model is going to work. Is there going to be an hourly increase for your services across the board, or will the increase only affect certain services?
Make sure to be completely candid when it comes to what you charge and why – otherwise clients may feel duped and start to lose trust. An email blast to your clients informing them of the changes, as well as an updated services list, is just the ticket.
You can also bring up the price increase in conversation in a way that doesn’t put anyone on the spot. For example, if a client inquires about web design, you might mention how that service is one of the items on your updated price list that you’re most excited about.
Prepare to lose
When you increase your prices, you may very well lose a couple of clients. Don’t worry! This a completely normal, healthy phenomenon that is part of the growing process.
As a small business rock star, you have a right to seek and find clients who are able to meet your price points without batting an eye. And isn’t that precisely who you’d rather be working with anyway?
If you’re suddenly too expensive for a few clients, let them go – it’s the only way to make room for new clients who can pay. Don’t negotiate or barter. Stick to your guns. If a client expresses regret at not being able to afford you, you might respond with something along the lines of “I completely understand. Whenever you are able to meet my prices, I’ll be happy to work with you again.”
How to increase prices? Embrace your new price points with confidence. People don’t try and barter at Starbucks, do they? The price of a latte is the price of a latte. And so it is with your business. Remember – you’re worth it!