The conversation people avoid.
WHY IT IS NECESSARY
Costs rise. Prices that do not rise mean shrinking margins.
Absorbing increases indefinitely is how small businesses fail slowly.
WHEN TO RAISE
When costs have risen When you are consistently busy When your prices are below your market Annually, as a matter of course
THE ANNUAL APPROACH
A modest annual increase is easier than an occasional large one.
Customers expect it and it prevents the position becoming untenable.
HOW MUCH
Enough to matter. A small increase that does not restore your margin is a wasted conversation.
HOW TO COMMUNICATE IT
Directly, in advance State the new price and when it takes effect Do not over-explain or apologise
WHAT NOT TO SAY
Lengthy justification Apology Blame
WHAT TO EXPECT
Some resistance. Fewer losses than you fear.
Most customers accept a reasonable increase from a supplier they value.
FOR EXISTING CONTRACTS
Honour them until renewal, then apply the new rate.
