If you’re like most small businesses, you’ve spent the past couple of years offering Idiscounts, deals and specials just to keep customers coming in the door. But more and more signs are pointing to the possibility that it’s time to consider raising instead of lowering your prices. That’s a welcome change, isn’t it?
Certain industries are seeing signs of revival. If increased business (and consumer confidence) isn’t enough of an impetus to raise prices, you may soon be forced to charge more as the possibility of inflation rears its ugly head.
In a post on The Entrepreneurial Mind blog, Dr. Jeff Cornwall offers some good advice on dealing with inflation in your small business. First, Cornwall points out, when inflation actually hits it’s harder to pass on price increases to your customers. So start now to pay attention to signs of inflation. These could be higher prices from suppliers or higher utility costs.
But, Cornwall says, you need to be cautious when adjusting prices. He suggests raising them in small increments, rather than holding off as long as possible, and then hitting customers with a big price increase.
After two years of price cutting, your company is probably ready to boost prices a bit whether or not inflation occurs. Using the gradual strategy can be a smart way to keep your prices at a level that benefits your business without crunching your customers.
If you need help assessing the best way to raise prices without hurting sales, a Mentor at SCORE can help.