If you are winning almost every quote and running at capacity, your prices are below the market. Raising them is the fastest available improvement to a small business, because the increase falls entirely to margin, and the work you lose is usually the work you least wanted.

The signals that you are under-priced

Three or more of those and the question is not whether to raise prices but by how much.

What an increase actually does

This is the part that changes minds, because the arithmetic is not intuitive.

A price increase falls almost entirely to profit, since your costs do not rise with it. A ten percent increase on a job with a twenty percent margin does not increase profit by ten percent; it increases it by roughly half again.

The consequence is that you can lose a meaningful share of work and still be ahead. Working out that number for your own business is the calculation worth doing before deciding anything, because it converts a nervous decision into an arithmetic one.

Most owners discover they could lose a fifth of their jobs and earn the same on considerably less work, which is a different business entirely.

How much

Enough to matter and not enough to be a different business.

Five percent is invisible to customers and barely worth the effort. Twenty-five percent in one step on existing customers is a conversation you will have repeatedly. Ten to fifteen is the range most small businesses can move in one step without disruption.

Where you are substantially under-priced, staging it over two increases six months apart is easier than one large step, particularly with repeat customers.

Where to start

New enquiries first

The lowest-risk approach. New customers have no reference point, so there is no conversation and no comparison. Quote the new rate and watch the close rate for a couple of months.

If it barely moves, the increase was overdue and you now have evidence for the next one.

The jobs you like least

Rather than an across-the-board increase, price the awkward work at what it is actually worth. You either stop getting it, which is a win, or you get paid properly for it, which is also a win.

Recurring customers last

These need notice and a conversation. They are also usually the most tolerant, because they know the quality of the work and switching has a cost for them too.

Telling existing customers

Direct, brief, in advance, and without apology.

A short message stating that rates increase from a specific date, roughly by how much, and that nothing else changes. Notice of a month or more is courteous and it also gives anyone who wants to book at the old rate the chance to do so, which frequently produces a small rush.

Two things to avoid. Do not over-explain, since a paragraph justifying the increase invites negotiation that a plain statement does not. And do not apologise, because an apology suggests the increase is unreasonable.

Something like: from the first of June our hourly rate will be X. This is our first increase since 2022 and it reflects rising material and insurance costs. Anything already booked is at the current rate.

What actually happens

Considerably less than owners expect.

A small number of customers leave, and they are disproportionately the price-sensitive ones who were already the most difficult. Most say nothing at all. A few mention it and continue.

The common outcome is that revenue rises, workload falls slightly, and the customers who remain are better to work with. The owner then wonders why they waited three years.

What has to be true first

An increase is easier to hold when something supports it, and this is where the site does real work.

Photographs of your own work, reviews that mention specifics, a clear explanation of what your price includes, and a stated guarantee all make a higher number defensible. A customer comparing two quotes with no other information compares only the numbers.

That is the honest connection between pricing and marketing: the marketing does not raise the price, it makes the higher price comprehensible. What that looks like at the point of decision is covered in guarantees and what they do to enquiries.

Do it while busy

The safest moment to test an increase is when you have more work than capacity, because losing a few jobs costs nothing you were going to do anyway.

Waiting until the quiet season means testing it when you can least afford to lose anything, which is why the increase keeps getting postponed. Being fully booked is the signal and the opportunity at the same time, which is the wider argument in marketing a business that is already too busy.

Frequently asked questions

How do I know if my prices are too low?

If you win most quotes, nobody argues about price, you are booked out, and your rate has not moved while costs have. Three of those together is a pricing finding rather than a sales success.

How much should I raise prices?

Ten to fifteen percent is the range most small businesses can move in one step without disruption. Five percent is barely worth the effort, and a much larger jump means repeated conversations.

Where should I start?

New enquiries, since they have no reference point and there is no conversation. Watch the close rate for a couple of months, then apply it to recurring customers with notice.

How much work can I afford to lose?

More than most owners think, because an increase falls almost entirely to margin. Working out that number for your own business converts a nervous decision into arithmetic.

How do I tell existing customers?

Briefly, in advance, and without apologising. State the date, roughly the amount, and that anything already booked is at the old rate. Over-explaining invites negotiation.

When is the best time to raise prices?

While you are busy, because losing a few jobs costs nothing you were going to do anyway. Waiting for the quiet season means testing it when you can least afford to lose anything.

West Coast Media Solutions Inc. provides web design, web development, hosting, digital marketing, and business consulting to organisations across Canada, drawing on more than twenty-five years in the field.

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