As a CFO, one of the most popular questions I get asked is “how can I make my business more profitable?” The answer is simple: you have to increase your prices and/or decrease the cost of doing business.

Let’s focus on increasing prices. Most small businesses have NEVER raised their prices. That’s because they don’t know the facts when it comes to increasing their pricing. They’re scared to death that ANY price increase, no matter how small, will lead to a mass exodus of all their customers. But is that really true?

For instance, let’s say you sell a widget for $100 and decide to increase your price to $110. Will that really lead to all your customers abandoning ship? Obviously, a few might leave but they are likely your biggest price shoppers who have no loyalty to your business anyway. They will beat you down on price every chance they get, and the moment you begin to make a profit, they’ll leave to take advantage of somebody else. If you create a perception that no one is better than you in whatever business you’re in, then most customers will stay.  

You will have upsells, down-sells, and cross-sells happening daily. You will implement higher pricing that most of your customers will accept, thanks to that shining perception you’ve created.