When should you raise prices?

When you are a small business, it can very quickly feel like you are fighting a losing battle to be the best priced company out there, but also making a profit! But when you really know your market, and you know what your customer wants, and most importantly you give it to them, you will start to see success. As that success grows, you may find yourself wondering whether now you have your foot in the door, it may be the right time to start thinking about raising your prices.

Of course, there are many warning signs that may flag up to you that it is high time that your prices went up a little higher. For example, you may find that your competitors within your niche have raised their prices, and have not lost a significant amount of custom. Your own company costs may have risen ñ after in, we are always seeing increases in utilities and minimum wages, and so your running costs have probably risen over the last few years. And lastly, it could be that you have not thought to raise your prices for a very long time. Given inflation, in may actual be that financially in real terms, you have without realising it lowered your prices!

However, if you do decide that this is the perfect time to increase your profit margins slightly by raising your prices, you need to make sure that you do it without losing your loyal customers. What you need to do to ensure that people will continue coming to your company is demonstrate to them that the value of what they are purchasing has also increased. You can create a new package that gives buyers the feeling that they are getting much more than they used to. You could alter the packaging itself, and re-brand the items as something new. This can also increase buyer anticipation, especially as you make the items seem exclusive and not available for very long.

At the end of the day, you need to accept that there may come a time in the future when you will need to lower prices again. Perhaps purchasers got bored, perhaps the economy slowed down again ñ whatever the reason, you need to learn to be flexible. It is flexibility that allows businesses to survive throughout everything that the economy throws at them, so learn to watch out for those chances when you can raise prices.

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