So my fb friend, Lorraine Kamesha posted an interesting question on her page. It actually prompted this post. Her question was, “How do you know when it’s time to increase your rates?” My initial reply was whenever you want more money. lol But then when I really started thinking about it, I came up with other things that could indicate that it is time to raise your prices.
- People tell you over and over again that your prices are too low.
My business besties and coaches used to always tell me that my prices were too low. I was scared to raise my prices because I was afraid that no one would pay them. I was pleasantly surprised to find out that not only would people pay my higher prices, but that the people that paid the higher prices were easier to deal with.
- People agree to your prices too fast.
You may think that people agreeing to do business with you quickly is a sign of good salesmanship (saleswomanship?), however, it could actually mean your prices are too low. Think about it this way. How do you react when you see something at an insanely low price? You snatch it up without thinking about it. Conversely, what do you do with a high ticket item? You comparison shop, ask questions, and do research? You don’t just go with the first item you see. Do you want to be Walmart or Nordstrom’s? Do you want to be fast food or a five-star restaurant?
- You have more work than you can handle.
Again, having a full slate of clients is a good feeling. It’s great when you know this month’s bills will be taken care of. However, you started this business to have time freedom. That’s not going to happen if yo u have so many clients that you don’t have time for anything else. If you’re at this point of your business, you need an assistant ASAP. You are going to need to be able to pay this assistant, so once you get to this point in your business, you need to raise your prices. Two things are probably going to happen: the clients that are paying the lower prices are going to leave and you will be able to provide better work to the clients that stay because you will have help.
- You want to offer a premium service that will cause more expenses.
Another time to raise prices is if you are planning to offer a premium service that will come with higher expenses. For example, let’s say you are a coach that only offers online coaching sessions. Maybe you’re going to start offering in person sessions. These sessions may require you to secure an off-site location. This will cause you to have to raise prices to account for the expenses you will incur from having in person sessions with your clients.
So those are the few reasons I came up with for how to know when to raise your prices.
[Image credit: WOCin Tech: https://www.flickr.com/photos/wocintechchat/25900654342/]