It’s that time of year again – year’s end. Companies across the globe are finalizing their financial budgets and calculating their fiscal year end numbers. If, after looking at your year end numbers you feel the need to increase your company revenues, then perhaps you are thinking about putting price increases in place for the new year. Nobody likes price increases and certainly implementing them is not one of your favorite business tasks. However, at some point, every company has to struggle with the concept of how to implement a price increase without risking their long time customer relationships.
For small businesses, price increases are a remarkably sensitive issue, which is why it is so important to take whatever steps are necessary to implement the price increases accordingly, without causing a disruption to customer relations. We here at Tax Alternatives fully understand the sensitivity and importance of price increases. With that said we have a few suggestions we can offer that will make the implementation of your price increases a lot easier and a whole lot less painful for everyone.
Helpful Steps for Small Business Owners
To begin with, it is critical that you are straightforward and honest with all your valued customers. Your customers will always appreciate your honesty and will, more often than not, understand the reasons behind your price increases as long as you are honest and open with your communications. It is important that you take the time to explain why you feel the need to increase your prices, discuss the timing with your customers explaining to them how the increases will affect them over a period of time. It is always best to be both honest and proactive, especially with such a delicate and sensitive issue.
Next, choose the best option for increasing your prices and stick to it. It is important to be consistent and fair when implementing your new prices. You should decide on an increase across the board, perhaps building in a cost of living increase with some of your long term customer contracts, or simply choose to implement the price increases on only new sales and retain your current prices for existing customers and customer contracts. Whatever option you choose, be certain to be consistent across the board.
Finally, we suggest that you give a good deal of focus to your customer relationships. Discussing the price increases and the effects of same with your customers and seeking their input, will certainly go a long way in the relationship. When your clients see that you are genuinely communicating with them and are interested in their input and concerns, they will feel more confident about the value you put on your customer relationships. Those clients that are truly relationship driven customers, are more apt to accept the price increases without any complaints.
If you are looking at your year end numbers and feel that it’s time for your small business to increase overall revenue by way of price increases, then surely we hope you will take our simple suggestions into consideration and present your clients with a smooth transition. There are always going to be those select few clients who are going to complain no matter what, but using these simple tips should present you and your relationship driven customers with a smooth, understandable transition allowing you to maintain those long term relationships with your valued clients year after year.
Keep in mind, that if you are over extending yourself with all the responsibilities of running a small business, then perhaps it is time to reach out to our professional teams here at Tax Alternatives and let us handle some of your administrative, tax, payroll or accounting tasks for you. Contact us today. We look forward to serving you in any way that we can.