Is now the right time to raise your prices? It depends on why you are doing it. Is there a justifiable reason or are you just hoping to blend into the crowd of everyone else who is jacking up their prices? Today we cover two articles that in some ways contradict themselves. One suggests raising your prices simply because everyone else is doing it so it won't lead to an uproar from your customers. The other takes a more long term outlook on the subject and reminds us that short term price gouging will lead to long term loss of customer loyalty. If there a reason to raise your prices, then do it, but make sure you can clearly explain and justify it. You only have one name, reputation, and brand - don't sully it for a few extra bucks in your pocket now at the expense of the future.
The first article did share some great financial strategies for this winter that can be beneficial to businesses. First, it is time to pay your deferred social security taxes. Back in March 2020, the CARES act allowed most businesses to defer paying their social security taxes for most of 2020. That deferred bill is due. You were required to repay half of that by 12/31/21, and the rest by 12/31/22 or face IRS penalties. Don't count on your payroll provider to do it automatically - you need to do it through the IRS website. Also, now is a great time to secure a loan if your company needs it. With inflation on the rise, the Federal Reserve is expected to raise interest rates around March of 2022. That means NOW is a great time to borrow money before the cost to borrow increases.
The second article dove deep in the price gouging situation that appears to be happening right now. The "new normal" sadly seems to be "grab as much as you can get" while the gettin's good and before the golden goose flies away. More importantly, whether the business is large or small, each one of them thinks that there's no reason in the world to take a step backwards and reduce prices. But consumers have longer memories, far more alternatives, and considerably less patience these days.
If you'd like for your business to be on the right side of this particular nasty storm - morality aside - now's the time to take a careful look at your own pricing and your going-forward strategy and to do two important things: (a) make sure the numbers still make sense for your business and your customers; and (b) make sure you communicate and carefully explain the reasons for price increases to your customers before you get lumped into the pile with all the other penny-wise and pound-foolish companies who are hoping that their regulars never catch on.
