From the course: Small Business Secrets

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Knowing when to raise or lower prices

Knowing when to raise or lower prices

From the course: Small Business Secrets

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Knowing when to raise or lower prices

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Perhaps you've heard some of those stories about pricing in a small business. Someone raised their prices by 100% and they increased sales by 500%, or maybe they lowered their prices and that resulted in an increase. Well, what is right? How do we know whether to raise or lower the prices of our products or services? I want to help you look at it in five different ways. First of all, let's consider inflation. Inflation is a factor. It is a reality in life and in business, and we must be aware of what is happening in inflation in your market. Now, every country has a different inflation rate, and it changes from year to year, so you'll want to stay on top of it. Generally speaking, in the United States where I live, the inflation rate has averaged about 3%. That means that every single year, in some way, we need to make up for that by increasing our sales by at least 3%. Number two, let's consider the cost involved. Now, sometimes the cost of your materials, perhaps the cost of your…

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