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Time To Raise Your Prices?

Small business opportunityYou've had your prices at a certain level for a while now and with a new year, you've been thinking about – gulp – raising them. But if you’re like many people in your position, you’re nervous about raising those prices even a little and a possibly uncomfortable conversation with customers – especially if they’re hiring you for a second project.

Fortunately, what’s really a standard part of doing business over time can be manageable and not something to be afraid of, particularly if you keep these tips in mind as you give yourself a necessary “bump up” on the bottom line.

1) What kind of customer do you want? Choose value over price.
The customer who complains about the slightest price increase or the kind that sees you for your value? The latter will pay you what you’re worth and likely be far more enjoyable to work with. It’s understandable that you’d fear losing a few customers due to changing your price structure. We won’t lie – it could happen. But higher prices make it a stronger possibility that they’ll be replaced by someone who more than makes up for them by paying more, is more loyal for subsequent jobs and even possibly provides more referrals. The price complainer isn’t likely to have those qualities at all, so their loss should hopefully be very short-lived.

2) When you raise your prices, own it. Don’t backtrack.
There’s a good reason why you’re raising your prices – so explain these factors in a letter that elaborates but never, ever apologizes for the increase. Show them that you appreciate the business and look forward to working with them again in the future. If you’ve added certain skills and equipment that bring increased value and a better quality product to customers, you can mention this added value as a justification for raising prices.

3) Talk about long-term value. Not short-term tasks.
It’s going to be challenging for potential customers and repeat customers to focus on the rewards of your efforts for years to come if you’re talking a great deal about your time and hourly rate. You’ll be seen as a commodity rather than someone who can raise the value of a kitchen or bathroom, two of the most important rooms for increasing value in the home. In that context, one project can go an awfully long way. What’s it worth then? Quite a bit – enough to justify the customer choosing you.

Steve Coven

In the early 1990’s Steve was looking for a new career. Someone told him about bathtub refinishing and he jumped in. It worked out well for him. He was good at it and quickly built a thriving business. Steve was purchasing his materials from NAPCO but he noticed the service deteriorating rather rapidly. Coming from a family with a strong entrepreneurial history, Steve approached NAPCO and purchased the company in 1992. Steve pledged to provide great service, always have in-stock what his customers needed and to continually innovate. His vision paid off as NAPCO has enjoyed strong growth due to loyal customers for which Steve is very thankful.

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