For Business Owners, Fully Understanding Price Increases is Essential to Sustainability
Price increases are happening everywhere in todays economy. In order for your business to remain healthy, you must pass this increase on to your clients/customers. Yes, this is really tough to do. Spend the time on a full analysis of your products/services. You need to understand current margins, the increase in cost from your vendors/service providers, and decide your strategy for a price increase to your customers. Be thoughtful about this analysis. Finding a balance between covering cost increases and harming your customer is essential. Sales may drop if customers begin to look elsewhere, but the customers who stay will keep your margins healthy. Consider price increases for selects products/services. Also consider timing. Can you give time for your customers to begin paying the increase ex., 30, 60, 90 days. Can you do gradual increases? Can you extend any payment terms? Consider all your options in your analysis. Once you've decided how to roll out the increase, be fully transparent to your customers. Consider their requests if they need further flexibility. These are tough decisions, but smart business owners will do the analysis and work with their clients.
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