How can I put up my prices without losing any clients?

For a small business, raising prices can be the kiss of death - but not if you do it right and keep your goods and services affordable for your target audience. Raising prices should be seen as the last resort and should be done only if you cannot feasibly absorb any costs internally. For example, if you're a logistics company experiencing increased fuel costs, consider consolidating your delivery vehicles into one vehicle or mapping out shorter routes.

But if raising your prices seems to be the only option, your next step is to decide what it will take for your customers to switch businesses, which largely depends on the type of product you offer and the demand for it.

For instance, if you are a cafe that is considering raising the price of a cup of coffee from $3 to $3.50, this may cause a migration of customers from your cafe to a competitor's down the road. However, if you are the only cafe on your street that makes quality coffee with excellent service, then a 50 cent price jump may not turn any customers away.

Once you have determined how much you should increase your prices to reflect your product's inherent value, you should communicate this change to your customers. This can be as simple as a sign explaining the price hike or an email campaign sent to your top customers. However you choose to communicate with them, ensure you are honest, reassuring and that you explain clearly the reason for the price hike.

Consider softening the blow with a discount coupon or throwing something small in for free. If you take these measures to inform your customers and make them feel valued, your business will still be well placed to benefit from a price increase.

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