How to Raise Your Prices Without Losing Customers: A Smart Pricing Strategy for Small Business Owners

Raising your prices can feel like a risky move, but it’s one of the most important decisions you’ll make in your business journey. Whether you’re wondering how to raise your prices, when to raise prices in business, or how often you should raise your prices, the reality is this: if you want to build a profitable and sustainable business, you need a solid small business pricing strategy.

As a Perth small business mentor and coach, I’ve helped hundreds of small business owners in Australia work through the fear of increasing their prices, especially in service-based businesses where the fear of losing customers can run deep. This guide will show you how to calculate your rates, how to price your products or services, and most importantly, how to start charging what you’re worth. Let’s dive in.

When Is a Good Time to Raise Your Prices?

There’s no one-size-fits-all answer, but there are some very clear signs it might be time:

You’re fully booked but still not making enough profit

• You’re consistently overworked and underpaid
• Your costs (materials, shipping, software, rent) have gone up
• You haven’t raised your prices in over 12 months
• You’re attracting clients who don’t respect your boundaries or value
• You feel resentful doing the work for what you’re currently being paid

If any of these sound familiar, it’s likely time to look at your small business pricing strategy.

How to Calculate Your Rates and What to Raise Prices To

Raising prices isn’t about plucking a number from the air. It’s about data, clarity, and confidence. Here’s how to work out how to price your products or services correctly:

1. Know Your Costs

Make a list of all your expenses – materials, packaging, software, subscriptions, tools, labour, and your time. Then add in your ideal wage. If you’re not paying yourself yet, this is a red flag.

2. Review Your Time

How long does each product or service take you from start to finish, including admin and communication? Be honest. Most business owners underestimate this.

3. Benchmark Industry Rates

Look at other businesses in your industry. If you’re significantly cheaper, ask yourself why. Undercutting might get short-term sales, but it won’t create long-term sustainability.

4. Factor in Profit and Growth

Your pricing needs to include space for growth and profit. Want to invest in better tools, outsource, or build a tax buffer? You need margin.

Need help getting the numbers right? My Pricing Masterclass breaks it down step by step: How to Price Yourself Masterclass

How Often Should You Raise Your Prices?

How often you increase your prices will depend on your business model and costs, but here are some common guidelines:

• 1–2 times per year is standard for most small businesses in Australia
• If your industry or supplier costs shift quickly, a quarterly review might be helpful

You can raise your prices more than once a year, just make sure you’re being transparent and intentional when you do it.

Why You Shouldn’t Be Charging the Same Each Year

Inflation isn’t pausing. Your skills are growing. Your value is increasing. Your experience has deepened.

If you’re charging the same prices year after year:

• Your profit margin is shrinking
• You’re less able to invest in your business
• You’re more likely to experience burnout

Staying underpriced keeps you stuck. You need to regularly revisit how to price your products or services so that your business stays sustainable.

Want to dig deeper into this? Read my blog on Why You Need to Charge Your Worth

Raising Prices Without Losing Customers

This is the fear, right? That if you increase your prices, people will leave. But your customers value consistency, communication, and clarity. Here’s how to raise prices without losing customers:

• Give notice (2–4 weeks is fair)
• Clearly explain the reason for the change (rising costs, better service, more value)
• Reinforce the value you bring
• Keep the tone warm and respectful

Sample Message:

“From 1st August, my prices will be increasing to reflect rising costs and the ongoing quality of service I strive to provide. If you’d like to book in at the current rate, now’s the time.”

Leverage the Power of a Last-Chance Offer

One effective tactic when increasing prices is to offer your audience a final chance to purchase at the current rate:

• Announce the upcoming price rise
• Set a clear deadline (and stick to it)
• Let people know it’s their last chance to buy at your current rates

This not only eases the transition but can also boost short-term sales without discounting.

What Happens If You Never Raise Your Prices?

This part is uncomfortable but necessary. Here’s what can happen:

• You operate on slim or no profit margins
• You underpay yourself, or not at all
• You can’t grow your business or outsource
• You eventually burn out and potentially close your doors

In a small business, especially in Australia, where costs and expectations are high, staying stagnant in your pricing means slowly stepping backward.

Final Thoughts

Raising your prices is one of the most powerful decisions you can make to protect your energy, value your work, and ensure your business thrives.

You didn’t come this far to stay stuck.

If this blog has hit home and you’re ready to review your numbers, build confidence, and create a pricing plan that works, book an Hour of Power session with me here.

Together, we’ll make your next move a strong one.