When you love what you do and you want to serve your customers well, it can be easy to charge less than your business need and even deserve.
But, here’s the thing. As a small business owner, you likely work really hard, and you deserve to be compensated for all you do and for all you’ve built. And, as your skills and business grow, you certainly deserve to be able to pay yourself more, to work less, and to reward and build your team. (I mean, that’s the dream, right?)
However, unless you’re charging enough for your products and/or services, you’ll never be able to reach those goals.
With this in mind, in todays article we will be discussing five signs it’s time to increase your prices as an entrepreneur.
When to Increase your Prices as an Entrepreneur – Flaxx recommendation (2023)
1. You aren’t able to cover your cost of doing business or pay yourself enough to meet your needs
Before you simply raise your prices, you do need to know the minimum you should be charging for your products or services based on your cost of doing business and your personal needs as well as living expenses .
Most entrepreneurs often don’t want to do the pricing math, but before you raise your prices, you need to know how much income your business needs to be bringing in so that your business can be profitable and so your revenue can cover both your business and personal expenses. or better still, set out an amount you will be paid as salary monthly aside from the business, so you can ascertain how much exactly is going back to the business per month or per annum
2. There’s so much demand for your work that you’re turning business away
After you’ve done the math, a sure sign that it’s time to raise your prices is that there’s currently so much demand for your work that you’re having to turn business away simply because there aren’t enough hours in the day.
Now, one solution to combat this might be to add an employee to help carry the load, but even if you’re in a place where you’re ready to hire, if your calendar is full and people are more than willing to pay your current prices, most of these customers will stick with you when you raise your prices.
After all, you’re clearly offering a high-quality service or product that people want to invest in. And, based on the current demand, you know what you’re offering is worth more than you’re currently charging, and you can feel confident about raising your prices.
3. You’ve invested in new equipment or further education
If you’ve recently invested in new equipment or further education, you likely need to raise your prices.
As a web content writer I’ve made countless advancement and other kinds of upgrades over the years, and I’ve also invested in workshops, online courses, mentorships, and various other forms of education.
While I do love writing and learning new things, these investments aren’t for me; they’re for my clients. And, my pricing needs to reflect these investments, because they come with a cost and allow me to deliver a better finished product and experience to those who invest in my services.
The same is true for you, friend.
As you improve your products or services through new equipment or further education, know that what you’re producing is worth more, and don’t be afraid to raise your prices accordingly.
4. You’ve improved your client experience
Another sign it’s time to raise your prices is that you’ve improved your client experience in some way.
Now, there are a lot of ways you can improve your client experience. For example, you could start sending your new clients welcome gifts; you could add an education piece to your client experience or you could write an email campaign for your clients to receive as they work with you.
The possibilities are endless!
But, elevating your client experience is certainly a reason to raise your prices. In fact, the quality of the client experience that you offer typically matters far more than the quality of your products or services.
I know this sounds counterintuitive, but the average person doesn’t know what makes a great content, However, they do know how working or interacting with a business made them feel, and 86% of people are willing to pay more for a great experience.
5. You aren’t making sales, because you’re priced in the “dead zone”
This next point might sound entirely backwards, but another sign that it’s time to raise your prices is that you aren’t making sales. If you aren’t making sales and receiving inquiries regularly but you’re serving your customers well and offering a great client experience, your lack of sales might be a result of being priced in the “dead zone.”
In other words, your current prices are putting you in limbo between two markets, and neither market is investing, because something just isn’t adding up.
For example, let’s pretend that you’re a fashion designer who produces stunning dresses, and you have a strategic website and a strong brand. When comparing your prices to the prices of other designers in your service area, you’re more expensive than one market but you’re less expensive than the next market.
As a result, when those with a lower budget come across your website, they can’t afford you. However, when clients with higher budgets find your website, they don’t inquire, because they’re confused about your lower price and are likely thinking, “How can this designers work be so incredible and cheap? This has to be a scam.” And, this confusion prevents your potential customers from reaching out to you.
While what you charge should be based upon your cost of doing business and your desired salary, it’s also important to look at the prices within your market to make sure you aren’t unintentionally putting yourself in a dead zone, which can lead to lack of sales.
How do you raise your prices without upsetting clients?
If you identified with any of the five signs it’s time to raise your prices that we discussed, your next question is likely, “How do I raise my prices without ticking off my clients?”
Don’t worry! There are a few strategies you can use to help your customers adjust to your new pricing.
1. If you need to make a big price change, give your customers a heads-up.
If you’re realizing that you need to raise your prices substantially, I highly recommend giving your customers a little warning and a chance to purchase at your current price for a limited time.
Whether you send an email to your email list or simply share on social media, let your customers know that in a specific timeframe], you’ll be raising your prices. Then, give them a little insight as to why in a way that benefits them and helps them see the value they receive when they work with you.
For example, you can simply explain that it’s been a while since you’ve raised prices, but because you’ve furthered your education and invested in equipment that’s going to allow you to better serve your customers, prices need to rise to accommodate these changes.
Your customers will appreciate your transparency, and many will likely make purchases before your prices rise. And, even after your prices rise, you’ll likely be shocked by how many of your customers stick with you because they value what you offer and appreciate your transparency!
2. Raise your prices incrementally
Another way to raise your prices is to raise them incrementally. There isn’t necessarily a hard and fast rule about how often you should raise your prices or by how much, but raising them slowly but surely is an easy, unobtrusive way to increase your prices without catching your clients completely off guard. Plus, a slower price increase may also help you adjust mentally.
3. Add value to your products or services
Another way to raise your prices and help your clients see the value of your work is to add value to whatever you’re offering. This is going to allow you to charge and make significantly more money, while giving your clients more value.
But when you improve your products or services by giving your customers more value, they will understand why prices have increased.
Conclusion
I know increasing prices can be scary. But, here’s the thing. There is nothing wrong with being paid and compensated for your hard work, your talent, your creativity, and how well you serve your clients.
And, with more money, you can likely better serve your clients, your team, your loved ones, your community, those in need, and the world as a whole.
If you identify with any of the seven signs that it’s time to raise your prices, remember that you’re the only one standing in your way of generating more income. So, raise your prices!
I hope you found this content resourceful, ill like to hear your thoughts in the comments.
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