Pricing: feel the fear and do it anyway
If you're struggling to make business ends meet these days, you're not alone - a December 2022 survey by HSBC found that around two fifths of small business owners in the UK reported that rising inflation and a decline in consumer spending (41% and 38% respectively) were a threat to their business, while also citing rising energy costs (36%), wage inflation (22%) and cash flow troubles (19%) as major contributing factors.
As costs continue to climb across the economy, small businesses are bearing the brunt of the inflation burden because they're slow to raise prices.
“A 30% increase in costs has an immediate effect on a small business,” explains Acumen's Director, Ross Murray. “Unable to translate the full increase across to their customers, a business might raise prices by 10% and take two-thirds of the hit. But it's worth remembering that most customers are less sensitive to price than we imagine, and that pricing is only one of the factors they consider - many customers even expect prices to be going up just now. In a tough economic climate where businesses of all shapes and sizes are feeling the squeeze from inflation, there's no harm at all in taking a more pragmatic approach to your pricing.”
We offer a free one-hour consultation to introduce you to pricing options, with further regular or ad hoc meetings available.