Are you pricing for profit in your small business?

  • by Carole Jordan
  • 05 May, 2017
Pricing for profit small business consultants brighton

It may be time for you to think seriously about what it is you offer your customers and how that is reflected in your pricing. 
Find out our top tips below!

Is it time to change your pricing strategy?

When consulting with clients we have often found that they believe the environment may be too competitive to increase prices and in turn boost profits. But competitive pressures should not hold you back from valuing your business and its services at the correct price.

pricing for profit accountants and consultants brighton

You may fear the loss of clients to competitors, but our experience has been that many small business owners overestimate the potential downside of a modest price increase, whilst underestimating the potential room for profits and growth! If your quality of product or service is that of a higher rate than your competitors then reducing your prices to compete with them is not a financially viable option. You will become reliant on increased sales volumes rather than caring for the customers you already have. Don’t underestimate your worth!

Think objectively about your small business

We recently consulted with a small business in manufacture and installation. From our perspective this firm took work that competitors could not, or would not, tackle. We found that they were applying standard pricing across the board. More than just lost profit opportunities, accurate cost estimates appeared difficult with the result that they lost money on some jobs. We persuaded them to experiment with a more flexible pricing model and to test price increases that reflected the difficulty of the work and their additional expertise.

They tested a 25% increase and, based on that success, a 50% increase in price. One year later they had discovered that their market was prepared to pay twice the original price for their services, increasing net profits by 50%. This has also changed their marketing strategy! They now promote themselves as specialists with a different proposition from their competitors, commanding a premium price.

Make time to think objectively about the proposition your business brings to its market. Try to think laterally in order to better exploit your skills and expertise. Think about the things that influence value and, therefore, price in your market.

If you would like advice on your pricing policy contact us on: 01273 882200 or email us at: . We implement a Profit Maximiser methodology to help boost the profits of our clients, and allow them to grow their businesses.

You might also be interested in...

Why not leave us a comment, or share with a friend...

Want free advice for your small business?
Sign up to our blog

Browse our other Small Business posts

Our latest blog

by Carole Jordan 11 Aug, 2017

HMRC have released their new advisory fuel rates for drivers of company vehicles. These came into effect from 1st July and allow reimbursement of fuel tax free at these levels.

by Carole Jordan 04 Aug, 2017

Nobody wants to pay tax on divorce. So how do you keep your tax bill down while coming to a sensible arrangement with your spouse?

by Carole Jordan 28 Jul, 2017

Since the change to Dividend tax came in you may be wondering if there are more tax efficient ways of drawing funds from your company.  Read more for an idea that can save tax each year.

by Carole Jordan 18 Jul, 2017

I love the summer for sitting back and reflecting on the year. Thinking back to the dark days of winter and forward to the joy of Christmas time. Now is the ideal time to review how your business is going and as you revive yourself through holidays and sunshine you’ll be well placed to make any changes come the autumn.

by Carole Jordan 17 Jul, 2017
Landlords will be expected to use Cash Basis Accounting from 2017/18.  
So what does that mean for your rental property accounts and tax?
More posts

Which Small Business support are you looking for?

Share by: