How to Determine When to Raise Rates and When to Absorb Costs

225: How to Determine When to Raise Rates and When to Absorb Costs WITH MICHELE WILLIAMS

As a business owner, one of the biggest challenges you face is managing your pricing strategy in response to fluctuating costs. Pricing is a crucial element that can determine the success or failure of a company. On the podcast today we will explore how to manage this in your business.

Topics Mentioned:

• Cost management 

• Brand promise 

• Pricing structure 

• Strategy  

Key Thoughts:

• Setting the right price for products or services is essential to ensure profitability, but sometimes external factors can lead to higher costs that may require a company to make tough decisions. Michele (1:03) 

• When you begin to incur higher costs as a business owner, one viable option is to adjust pricing accordingly. Increasing the price of products or services can help offset the additional expenses. Michele (1:59) 

• When facing higher costs, you have the option to absorb the additional expenses and reduce profitability. This can be a difficult decision, as it may lead to short-term losses, but can lead to long-term benefits. Michele (3:59) 

• There is a sweet spot for every business which might mean a minimal increase in pricing along with internal expense reduction strategies to mitigate loss of profitability. Michele (5:25) 

Contact Michele:

• Email: Team@ScarletThreadConsulting.com

• Facebook: Scarlet Thread Consulting

• Instagram: @ScarletThreadATL

References and Resources:

• Scarlet Thread Consulting

• Metrique Solutions

• Sign up for a Discovery Call