Have you been thinking about raising your prices but you are not sure if you should? Well I’m here to tell you that you should.
So lets start with why? Because you want to raise your prices so you will always have room for new clients!
If you're booked solid with regular clients, you will never have room for new clients, which is what keeps us creative. Being content with those same ole people every day will eventually end you up stuck in a rut and behind the times.
So when is it time you ask? When your books are to the point you are turning away new clients. It's a lot easier to get someone who has never came to you to pay your new prices then your old clients to pay more than they are used to.
As you raise your prices you will start to notice a change in your clientele. The higher your prices go, the more respect you will get from your clients and your new clients will be from a different income level.
Let's say you used to have a lot of solopreneur clients, or clients that came in always asking what they can buy from you on a budget, by which they really mean 'how much are you willing to do for free? Your profit margins per client by definition are always going to be a lot lower for those clients, and the work involved is always going to be just as much as if they were paying full price. But what happens if you raise your prices?
For example, if you raise your prices only 20% and you loose 10% of your clients, what just happened? the remaining 9 of your clients are paying 20% extra, so your overall revenues just went up a total of 8% and you just saved yourself 10% of the volume of work to achieve it.
You have to have the mindset that loosing a few clients is worth gaining high-end clients to replace the ones you may loose. This is a tradeoff that is well worth your time and efforts. There are whole sales methodologies developed on the principle of doing something that drops off your bottom 10% less desirable clients each year anyways, so there is a whole lot more data to go on than just this one limited example, so the point is well worth exploring.
Another point worth exploring is whether or not you're leveraging all of the secondary and passive revenue generation models you have access to. Suppose you sold signage space in your store window or on your website for an extra $250 a month, and you sold 4 of those spaces each month. That's an extra $1000 coming in for which you didn't have to actually DO any production or consulting work. If you just wanted to keep the same net revenue coming in every month, then that $1000 just bought you some well deserved time off work instead. Either way you look at it, the secondary revenues can either allow you to concentrate on more profitable clients by accepting the losses of more of your lower profit clients, or they can scale up your extra profits with a lot less work for the money.
So, don’t be afraid of loosing those few clients and focus on gaining better clients and making more money in the long run.