As a solopreneur or small business owner, you have probably questioned whether or not you should increase your prices. Most likely, you have questioned it more than once.
While increasing your prices or rates can be necessary as you grow your business, it can also be stressful. Questions may arise such as how much should you increase, will you increase across the board or only for new clients, and when is the right time to increase them?
These are complicated questions to answer, and very specific to your business situation, but there are some general guidelines you can follow to help you determine when it’s the right time to consider a price increase.
If you are still building your business, having lower rates can attract more clients, which may be just what you need to propel your business forward.
There are several GOOD reasons to increase your prices.
Some of them include the following:
Your business is growing from one stage to the next
Time management is a problem
You need additional resources
You’ve niched down (either your offerings and/or your market)
You need to support future sustainability (both business and personal)
Growing your business from one stage to the next might be when you transition from being a new business owner to a more experienced one. It might also be when you go from being a solopreneur to hiring your first contractor or employee.
There are several other situations where you may need to make big changes in order to grow, and those changes might mean you need to bring in additional revenue. For example, when time management becomes an issue because you’re so busy with client work, you no longer have time to manage your business and you need to delegate and build your team.
However, there are reasons you may NOT want to increase your prices:
You don’t have enough clients
You need to focus on building your brand (and brand awareness)
Your market won’t support higher rates
While it would be great to have the philosophy of “just charge more and the clients will come,” in reality, it might not be that easy. If you are still building your business, having lower rates can attract more clients, which may be just what you need to propel your business forward. Then, once you have plenty of clients (or at least a pretty consistent amount of clients), consider increasing your prices.
And what about your market?
Depending on your situation, you could approach this a couple of ways. If your current market won’t support higher rates, but another market will, it might be time to consider a new market or niche. However, if no market will support higher prices, it might indicate that your offerings have a peak price, and it’s best not to go over it.
Increasing (or even not increasing) your prices can be risky. It’s best to have a strategy behind your price increases to determine the best time to implement them.
If you have questions about your specific business, and whether or not it’s the right time for a price increase, you can schedule a discovery call with me.