Why pricing is the “one thing” to focus on this month.
We are all in business to provide for ourselves and our families.
For our team.
To have an impact.
To make our lives better.
And maybe to change the world.
And we do that in two ways: either with money or with time.
Cost of living crisis
One of the most common discussion points for us in the last month is the cost of living crisis.
The price of everything is going up, and this has the potential to squeeze the “money” aspect for all of us.
And that squeeze then could impact the “time” element too.
And time is the only thing we can’t get more of.
Let me explain…
Let’s assume we’re working the exact amount of hours we want each week. The “Goldilocks” number of hours – just right to balance work and home and play and health.
And we are all charging the right amount to earn the money we need for us, our lives, our families.
But the cost of everything is going up.
So the money we earn no longer covers our cost of living.
Doing nothing sends us backwards
Think of swimming up a river (maybe not one of the highly polluted UK rivers…!).
Do nothing, and we get swept downstream.
It takes effort to stay in the same spot.
And even more effort to progress upstream.
Especially against a fast flowing river.
Assuming as a minimum you’d like to stay in the same spot, in a time of rising prices our choices are:
a) reduce spending,
b) increase income.
And for the purposes of this blog we’ll assume spending is already reviewed and optimised.
So we need to increase our income
To maintain our position, to cover the increasing costs of, well, everything, we all need more money.
And again there are two options:
a) do more work,
b) charge more for existing work.
Doing more work requires more of our time. Which takes us away from our existing work, life and family commitments.
And in this example, our time is already in good balance; we’re already working our chosen hours.
Where might the extra work time come from?
If we do more work, it must be taken from our existing commitments.
This affects other things – maybe our home life takes the hit and we end up working evenings and weekends. Sound familiar?
And that’s not a very attractive option.
So, charge more
To maintain our standards, to continue to deliver exceptional service, and to ensure our business continues to provide for us, our teams, and our families, we MUST raise our prices, when the cost of everything else is going up.
And if all of us put our prices up, we’ll all be ok.
If we need permission – and we don’t, by the way – remember; supermarkets think nothing of raising prices. And petrol prices go up quickly and come down slowly.
Fossil fuel companies are certainly profiting right now
But we’re not talking about hoarding billions, we’re simply suggesting that in order to cover the increased cost of everything, we owe it to ourselves to raise our prices too.
If we don’t, we end up subsidising the shortfall personally, with our time, or by having less money for ourselves.
Take action today
If our income is static, and our costs are increasing, then our profits will be falling.
And as a business owner, that could be hitting us directly in the pocket.
So we should review our pricing now. It’s essential for the future of our businesses.
Conclusion – we have an ethical obligation to raise our prices
Ignoring the impact of our own pricing, in a time of widespread rising prices, could be detrimental to our businesses.
And to ourselves.
That’s why pricing is the number one thing we should be focussing on this month.