Economic reality sees costs increase, therefore your prices may need to follow if you want to maintain your margins. Cost cutting, either through eradicating unnecessary expenses or improving efficiency or productivity, is one way to maintain margins, but if you’ve exhausted this option, raising your prices may be the next step.
Review your expenses regularly to form an idea of what kinds of sales you need to make your business sustainable and predict what may happen if you raise your prices – can you expect to sell as much? A price matrix, where you can crunch hypothetical numbers, will help you decide whether a rise is worth the customer risk.
