Busy? Raise Your Prices!

I remember when I was in Marketing 101 in college and we discussed supply and demand. Below is a description from Wikipedia and how it describes the term "Supply and Demand":

The four basic laws of supply and demand are:
If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity.
If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity.
If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.
If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity.

The price P of a product is determined by a balance between production at each price (supply S) and the desires of those with purchasing power at each price (demand D). The diagram shows a positive shift in demand from D1 to D2, resulting in an increase in price (P) and quantity sold (Q) of the product.

So what am I trying to say, you ask? When was the last time you bought bread, milk or even gasoline and it stayed the same price every time you bought it? Prices for everything are constantly changing depending upon workload, inventory, customer demand and a volume of other factors. When is the last time you had a price change? Just like every other business you need to adjust your price depending upon demand. During busy times, raise your price 10 to 20%. During slow times offer a lower rate. You could even postpone major, time consuming jobs until business is slow provided you get a deposit and the customers equipment is still usable, to a time when you could use the work by offering the the discounted price.

I even adjust my workshop prices depending upon the popularity of that particular location, if you need certain state credits and my costs for that location. Look at my schedule at www.frankpresents.com and see for yourself.

What should you do? Well, if summer is your busy time, increase your price beginning Memorial Day weekend, then drop it back to normal after Labor Day. I've had some of my clients say things like "What if a customer finds out you just raised your price?" Okay, so agree and say "Yes, it's unfortunate how everything is going up, just yesterday it cost me almost $90 to fill up my truck. Hopefully it will go back down to a reasonable price this fall."

There you go, give it a shot and see what happens, yes you may lose some business, but odds are it will be the price shoppers anyway and if you raise your price 10% and lose 5% of your business, Great Job! Less Work, More Money!