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A Factsheet from

It’s the question keeping thousands of small business owners awake at night: Can I afford to put up my prices without losing customers?

You’re not being greedy. You’re trying to survive. Costs are rising across the board: raw materials, rent, utilities, the cost of borrowing. You’re working harder just to stand still and yet the thought of charging more fills you with dread.

What if my customers go to a competitor? What if they say I’m not worth it? What if they simply walk away?

Pricing is one of the trickiest parts of running any business but particularly difficult for a micro business. Undercharging though undermines your viability as a business and reduces your margins. I’m talking to business owners who’ve had to stop paying themselves a salary. That situation isn’t sustainable. If your margins are shrinking to nothing, or if you’re working for free once the hours and overheads are accounted for, something will give.

Know your numbers. Many small business owners rarely get time to sit down and do the sums. Without the numbers you don’t realise how much profit (or loss) you’re making on each product or service. Understanding your true costs, including your own time, is crucial.

If you do have to put prices up, think about how you communicate price changes. Most customers aren’t purely price-driven. They’re loyal because they like your work, trust your expertise, or value the relationship. If you’re transparent and say “Our costs have gone up, and to keep delivering the quality you expect, our prices are changing too”, you’ll be surprised how many people understand. There’s the old adage that people buy people, not products. 

Some steps can ease the transition. You could introduce new higher prices for new customers first. Think about how you bundle your services together. Can you do that differently to highlight the value you offer? If your offer includes one-on-one service, expertise, or flexibility, make that clear.

Brace yourself for the possibility of losing a few clients. Do the sums: what if the worst case scenario happens and what if the best case scenario happens? The customers who stay will be the ones who value what you do, pay you fairly for it and may want to buy more from you in future. 

If everything else is going up but your prices aren’t you effectively giving yourself a pay cut every year. You deserve a business that sustains you, not just your customers.