{"id":15533,"date":"2022-07-23T05:00:05","date_gmt":"2022-07-23T05:00:05","guid":{"rendered":"https:\/\/www.markperlbergcpa.com\/the-art-of-raising-prices-for-atlanta-small-businesses\/"},"modified":"2022-07-23T05:00:05","modified_gmt":"2022-07-23T05:00:05","slug":"the-art-of-raising-prices-for-atlanta-small-businesses","status":"publish","type":"post","link":"https:\/\/prosperlcpa.com\/blog\/2022\/07\/the-art-of-raising-prices-for-atlanta-small-businesses\/","title":{"rendered":"The Art of Raising Prices for Atlanta Small Businesses"},"content":{"rendered":"
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The unfortunate reality of things right now is that businesses across the board might need to raise their prices. Inflation\u2019s increasingly pervasive effects, as well as continued supply shortages, demand that pricing models change \u2013 or at least be re-evaluated. <\/p>\n

And while everyone \u201cgets it\u201d that prices are rising everywhere, the customer still may be unhappy about it\u2026 and tempted to seek out cheaper alternatives.<\/p>\n

But before I start on today\u2019s installment of my inflation series, I want to mention this:<\/i><\/p>\n

Did you know that the Small Business Digital Alliance<\/span><\/a> (part of the SBA) has this great resource, chock-full of free tools and resources from Fortune 500 companies to help small businesses like yours grow by going increasingly more digital? <\/p>\n

Needing guidance on many aspects of your Atlanta business is something we have heard over and over again. And of course, even with all those free resources, sometimes you just need a little \u201cface time\u201d from a trusted advisor. Set up an appointment if you need some help thinking through price raising, digital business, etc.:
calendly.com\/mark-perlberg-cpa<\/a><\/strong> <\/p>\n

Because after all, raising prices can be so tricky. Keeping <\/i>customers in the process \u2026 even trickier. We\u2019re all feeling the strain of increased prices everywhere, yet you can\u2019t avoid shifting your pricing model to accommodate for what we\u2019re seeing. <\/p>\n

But (GOOD NEWS) \u2026 there is a way you can do it and still retain many of your customers\u2026<\/p>\n

The Art of Raising Prices for Atlanta Small Businesses<\/strong><\/span>
\u201cThere is no victory at bargain basement prices.\u201d \u2013 Dwight Eisenhower<\/i><\/span><\/p>\n

Prices are on the rise everywhere right now. What about yours? <\/span><\/p>\n

From just a few pennies to outright sticker shock, hiking prices is one of the quickest paths to losing customers. But you\u2019ve got ends to make meet, too. <\/span><\/p>\n

Our inflation series continues with one of the most pressing problems for businesses today: How much you need to increase your pricing models \u2013 and what to think about before you do. <\/span><\/p>\n

Worry and response<\/strong><\/span><\/p>\n

Current inflation is 8.6% year over year, a seemingly endless upward direction that worries most businesses. Almost nine out of 10 have told surveys that they\u2019re also already seeing the hit in higher expenses such as supplies and services, some by as much as 50%. Throw in employees probably wanting above-average raises and you\u2019ve got a compound problem. <\/span><\/p>\n

Businesses\u2019 response? Not hard to guess: Almost nine out of 10 small businesses in one survey said they had to hike their own prices \u2013 and that\u2019s on top of the hefty percentage who\u2019d already raised their prices since the pandemic started. <\/span><\/p>\n

The key question is, raised prices by how much? <\/span><\/p>\n

Almost half of businesses had to increase prices by more than 20%; almost half said they kept the increase to no more than 15%. Some companies that haven\u2019t increased prices in years have had to pass along furious new costs to potentially furious old customers.  <\/strong><\/span><\/p>\n

Take a hard look<\/strong><\/span><\/p>\n

Before you just decide to pin down your average higher costs and just base your markup on that across the board, take a harder look at your operation and your pricing model. <\/span><\/p>\n

Do you stand out?<\/i> Yes, as a fellow small-business owner, we know it\u2019s a hard question to ask yourself but re-assessing your pricing just starts with it: What makes you so special? <\/i>Why should your customer pay you? Are your services unique? <\/span><\/p>\n

Special is special.<\/i> You can increase the price of specialized or exclusive products much easier than you can those of commodities, which customers can easily find replacements for. Special products and services will bear the weight. The same holds true for customer loyalty. How often do your customers say they\u2019d never shop anywhere else? (How often do they prove that, too?) A loyal customer will pay more \u2013 just don\u2019t think you can push that forever. <\/span><\/p>\n

Competition.<\/i> What\u2019s their price point and range, and how does it compare with yours? If yours is higher, don\u2019t automatically assume that you have to match your competitors\u2019 deal. Do you offer customers resources that the other doesn\u2019t, for example? If you don\u2019t, can you add those resources economically? (As you can imagine, it\u2019s critical to answer those honestly.) <\/span><\/p>\n

Strategies<\/strong><\/span><\/p>\n

In with the new.<\/i> What do you offer that draws in most of your new customers? Raising those prices should be a last resort. You want to increase income from your premium, extra, or add-on items. Your customers don\u2019t use those until they\u2019ve become more loyal to your brand \u2013 and become customers who will put up with a price increase longer before they think of leaving you. <\/span><\/p>\n

You do still want to give special attention to these products and these customers, though (more on this below). <\/span><\/p>\n

Go slow.<\/i> Tempting though it is, jacking up prices across the board isn\u2019t necessarily your best move. And when you do, raise prices gradually<\/i>. As we mentioned, it\u2019s best to raise prices on premium products and services first. But you can tweak both the offerings and the pricing to make them more palatable.<\/span><\/p>\n

Tell it like it is. <\/i>Be upfront with customers about price hikes \u2013 give some clear reasons. Much as people hate bad news, they hate nasty surprises or being kept in the dark more.<\/span><\/p>\n

Bundle.<\/i> Combining multiple products at a higher price point, giving special warranties, comping higher shipping costs, offering more services or rewards for subscriptions: They all bring more money through your door by having the customer buy more, just not a la carte. Do be careful about devaluing your brand with too many discounts. <\/span><\/p>\n

Improve your customer service.<\/i> Next to the sale itself, this is your pivotal touchpoint with a customer. Invest in it, and you\u2019ll solidify your customer base generally. <\/span><\/p>\n

Change marketing.<\/i> Some customers will pay more for a product or service they perceive as being worth more. Your marketing might need to start highlighting your value, or you might need to go after new customers who don\u2019t always think about price first.<\/span> <\/strong> <\/span><\/p>\n

 <\/p>\n

Remember, raising your prices is just part of business. You\u2019re looking for that balance in these troubled times. <\/span><\/p>\n

And we\u2019re here to help find it. If you need some help, let\u2019s talk: <\/span>
calendly.com\/mark-perlberg-cpa<\/a><\/strong><\/span><\/p>\n

You\u2019ve got a trusted Atlanta guide in your corner.<\/p>\n

Here for you,<\/p>\n

Mark Perlberg<\/strong>
<\/strong>
Mark Perlberg CPA PLLC<\/strong><\/p>\n

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