Most small business owners think that a price increase no matter how small will lead to a mass exodus of their customers. But is that really true?

My name is Michael Barbarita with the know your numbers minute.

Let’s say you sell a $100 item at a 30% gross margin and you have a 10% price increase to $110.  If you lose 25% of your client base you will be at the same profit level as when you were selling the item for $100. Are you really going to lose 25% of your client base for a 10% increase? And if by some chance you do, you have just made room for 25% more customers at the higher price. Results may vary with higher gross margins.

And remember, the most successful business owners know their numbers.