should i raise my prices?
this is the decision founders sit on longest. not because it is complicated, but because it is exposed. here is a way to work it through.
a quick note before anything else. nobody on the internet can tell you whether to raise your prices, including us. what follows is a way to structure the decision, not a recommendation. your market, your costs and your customers are things only you can see.
with that said, this call sits open longer than almost any other, and the reason is rarely arithmetic.
start with what you are actually afraid of
before the spreadsheet, write down the sentence you are avoiding. it is usually one of three.
- "customers will leave and it will turn out i was not worth it."
- "i will have to have an awkward conversation with people i like."
- "i will find out i have been undercharging for two years."
that third one is worth sitting with, because it is the one that keeps prices frozen the longest. raising a price is partly an admission about the old price.
none of these are reasons not to raise. but if you skip this step you will do a lot of analysis that is secretly about the fear, and the analysis will never resolve, because it is answering the wrong question.
then check the four things that actually changed
a price is a decision you made at a moment in the past, under conditions that have probably moved.
- your costs. what has gone up since you set this price? if you have not repriced in two years, inflation alone has cut your margin.
- what you deliver. is the thing you sell now the same thing you were selling then? most people improve their product continuously and their price never once.
- who is buying. if your customers have got larger or more serious, your price is aimed at a segment you no longer serve.
- the comparable. what do adjacent options cost now? not to copy, just to know where you sit.
if two or more of those have moved and the price has not, you already have your answer and what remains is execution.
run the arithmetic in both directions
the useful calculation is not "how much more will i make". it is "how much can i lose and still be ahead".
if you raise by twenty percent, work out how many customers you could lose before you are worse off than today. for most service and subscription businesses that number is larger than people expect, and seeing it stated plainly removes a lot of the fear.
then do the other one. what does staying flat cost you over the next twelve months, given what your costs have done? that number is real too, it is just invisible, which is why it never wins the argument.
ways to test it without betting everything
- apply the new price to new customers only. existing ones stay where they are for now. you learn whether the market accepts it without touching a single current relationship.
- if you do move existing customers, give real notice and say it once, plainly, without a paragraph of justification. over explaining reads as uncertainty.
- consider grandfathering your earliest supporters permanently. it costs little and it buys a lot of goodwill.
- pick a review date up front. three months is usually enough to see the signal.
then close it
write it as one sentence with a date. "new pricing goes live for new customers on the first of september." give it a confidence number out of five, and set a date to look at what actually happened.
that last part matters more than it sounds. the value of this decision is not only the revenue. it is that in three months you will know something about how you price, which you can use on the next one. that only works if you wrote down what you expected before you found out.
if this has been open a while, the decision fatigue calculator will tell you roughly what the wait has cost, using your own estimate of what the change is worth. and if you recognise the pattern of knowing the answer and not moving, that has its own diagnosis.