When should you put your prices up?

Most small businesses put their prices up later than they should, and they know it at the time. There's a figure you've been charging since a year you can't quite remember, and every time you think about changing it something more urgent happens.

The awkward part isn't really the conversation with customers — that's usually milder than people expect. It's that there's never an obvious moment. Nothing arrives to tell you the price is now wrong. So this is about the signals that do tell you, if you know to look for them.

Start with what the job actually earns you

Before any of the softer signals, do one piece of arithmetic. Take a job you do often and work out what you actually keep from it.

Take the price and subtract the materials, the fuel, the travelling time, the quoting time and the evening you spent writing it up. Then divide what's left by the hours it really took, counting all of those.

Most people are surprised, and not pleasantly. The travel and the admin are where the money goes, and they're invisible in the quoted figure. If that number is below what you'd accept as an hourly rate from somebody else, your price is already wrong, and nothing else in this article matters.

The five signals

You're booked a long way out and turning work away. This is the clearest signal there is, because if people are waiting six or eight weeks and still choosing you, the market has told you plainly. Raise the price while that's true, since it's much harder to do from a quiet January.

Nobody ever hesitates. If every quote you send gets accepted without a flicker, you are under the market. A healthy price draws the occasional flinch and the occasional no, so winning everything sounds like success and usually means you're cheap.

Your costs have moved and you haven't. Materials, fuel, insurance and tools all creep, and if they've gone up since the last time you changed a number, you've already taken a pay cut without deciding to.

You've got better at it. You're faster, tidier, getting fewer callbacks and more qualified than you were three years ago. Charging the same for better work is a decision, and it's worth making on purpose rather than by default.

You resent the work. This is the signal nobody mentions, and if a particular job makes your heart sink when it lands, the price is usually why. You'll go on doing worse work for less money until you fix it.

And the signals that mean don't

A quiet month. Raising prices during a slow patch is the worst possible timing, and it's the moment people most often consider it, out of a kind of defiance. Fix the quiet month first and come back to this.

Because somebody else did. Their costs are not your costs, and their customers are not your customers.

To sound more expensive on purpose. Pricing yourself upmarket is a real strategy in some businesses, and it doesn't work as a bolt-on. Putting your number up without anything else changing just makes you the same business, dearer.

Right after something went wrong on a job. Wait a couple of months, because fair or not, the timing reads badly to everyone involved.

How big, and how often

Small, frequent rises are worse than they sound. Going up five per cent every eight months means you're having the awkward conversation constantly and never quite catching up.

Better to do it once a year, on a date you pick, and go to the number that's actually right rather than the one that feels defensible. Most owners undercorrect — they work out they should be at £200, and put it to £175 because that feels less alarming, and then they're behind again by spring.

Use whole numbers as well, because £180 reads as a price while £177.50 reads as a calculation somebody might want to check.

Expect to lose a few, and count first

Some customers will go, and it's worth doing the arithmetic before you decide that's a catastrophe, because it usually isn't.

Twenty customers at £160 is £3,200. Eighteen customers at £180 is £3,240 — and it's two fewer jobs to fit into your week. You're ahead on money and ahead on time.

In practice, fewer leave than you expect. The ones who do are typically the most price-driven, which correlates depressingly well with the most demanding.

Make the new price the easy one to find

Here's what makes the next rise much less painful. The reason a price change feels like a campaign is that your prices live in your head and get told to people one call at a time.

If they're written down and published, a rise is an edit. New enquiries see the new figure and never know there was an old one. Existing customers get one short message. Nothing else has to happen.

That's part of what we built hailera around: you write your prices and the conditions that move them once, check them yourself, and publish them as an agent, so your website and the AI apps people ask are quoting the current number rather than one from two years ago. A page on your own site with honest "from" prices does much of the same for nothing, so if you haven't got one, that's the place to start — and writing it will force the pricing decision you've been avoiding anyway.

Put a date in the diary

The most useful habit in this whole subject is to stop treating it as an event. Pick a month — a quiet-ish one you can think in — and review your prices in it every single year.

Do the arithmetic from the first section, then look at the five signals. Decide either way, and if you're changing something, tell people in the same way each time.

Customers get used to that rhythm. And you never again end up two years behind, doing jobs at a rate that made sense when the van was newer and your knees worked better.

Today: take one job you do regularly and work out what you keep per hour, counting travel, quoting and the evening writing it up. Compare it to what you'd accept from somebody else. That comparison is the decision.

Written by the team at hailera — we help small businesses answer customer questions without being there.