Increase Your Prices

Every bookkeeper knows that from time to time we must increase our prices.  So why does this simple but essential task fill us with fear? When I started my bookkeeping practice so terrified was I to increase my prices that I never did it for the first few years.   What if all my clients abandoned me at once? What if I wasn't worth the increased price? Looking back on it these fears were irrational but felt so real at the time.  By not regularly increasing my prices I was setting myself up for huge problems in the years ahead.  I was blissfully unaware.    Four years in and I had clients who joined me at different times all paying different amounts for fairly similar services.  This was leading me to feel resentment towards some of my earlier clients. I put their work off because newer clients were paying me more.  This was a mess of my own making and one that didn't need to ever happen. I had to do something fairly drastic to bring everyone back in line. This meant that some of my earliest clients were getting four years worth of increases at one time.  The thought of the conversations I was to have terrified me. Most of my clients understood.  Even though their prices were going up by quite a bit, they accepted that it was the first increase in years.  They expected that the price of the service would rise.  In fact, some wondered why it had taken me so long to get around to it.  The conversations would have been much easier if I had implemented small increases each year. How do you increase your fees? The first thing to accept is that is scary.  We do have fears regardless of how irrational they may be.   Remember not all clients are created equal.   The first thing I would encourage you to do is rank your clients between A and D.  Your A clients the ones you love working with, and the D clients are those you would do a dance if they left you. Start your increases with your D clients.  They are your guinea pigs. Send them a letter and tell them that in one month their prices will increase by 10%.  Once you realise that the sky doesn't fall down, write to your C clients. Then to your B clients, and finally to your A clients. By staggering your increases in this way you avoid the fear of your clients leaving you at once.   Give it a go and let me know how you get on.