Time for a Pricing Review (Are you charging enough?)

I still drop into the APHA Discussion Forum on occasion. It’s a great way to keep up with the issues and hurdles of the day. There are so many of them, and the conversations are often so informative!

A most important and timely post a few weeks ago asked this question: with inflation, and the end of the pandemic, how do I know if I should raise my prices? And if so, by how much?

My resounding answer is not just yes, but H*LL yes!

Several years ago, I built the Setting Your Prices course found at PracticeUP! Online. Based on the feedback and its ratings, it’s not just a popular course, but it’s also very helpful for those who haven’t figured out yet what they should charge. That’s still true today.

But we, as smart business owners, also have to recognize that the hourly-rate answer the course produces is only a screenshot in time. You might figure out your pricing today, but in a few years, there will have been even more inflation or you will have acquired more extensive skills, or your costs to do business will have grown – all those business “things” will require a rethinking of your pricing.

A simple example:

The original course was built and launched in 2019. So, suppose you had figured out your pricing in 2019 and you haven’t changed it since. Today is (at least) 4 years later. A quick calculation using the US Inflation Calculator, tells me that one dollar you spent on your business would cost you $1.19 today – or an inflation rate of 18.7 percent.

OK – now let’s also remember that you have developed that much more of a reputation, have that much more experience, are even more skilled than you were then, and the VALUE of your practice is even higher…. PLUS: your expenses are higher too, because, every other business you interact with (phone, internet, gas, etc) have raised their prices already.

See where I’m going?

I would go so far as to say that, at a minimum, your pricing should be 25% higher today than it was four years ago.