Raising Rates Question

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Jul 9, 2017
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stephanie barber
#1
I haven't raised rates since 2015 so its definitely time. How do you calculate just how much your going to raise your rates? Also does someone have an example they could share with me? I'm not sure how to word something like this.
 

Todd the Cleaner

Todd Cottino
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#2
I don’t do janitorial but I do raise my prices every January 1st. I generally increase my price about 3% per year.

I generally don’t even mention the price increase unless the customer says something. Most customers don’t even notice unless it’s been years since their last service.

If you have contracts I would let each account know at renewal time that it has been 3 years since your last price increase and that due to rising costs their new price will be $XXX. People know prices go up. Nobody likes it but it’s a fact of life and your customers will understand. I would let them know the new price will be guaranteed until January of 2020. After that I would put an annual increase in place and you can send a letter out every December letting them know the 2020 price is $XXX. Then the next December send them a letter with your 2021 prices. After a couple years your customers will be accustomed to your annual price increase.
 
Jul 9, 2017
71
11
8
Real Name
stephanie barber
#4
Best to calculate your expenses and costs of doing business to fully evaluate your profit margins. Don’t want to short yourself

WOuld you mind taking a look at my other post, review raised rate notice? I'd like some feedback on how its written and what I should change. Constructive criticism is OK with me :)
 

PistolPete

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Sep 28, 2014
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Peter Dymond
#5
I commented on your other post.
Just a couple of thoughts.
If you have loser accounts that you underbid, then you can raise the price to where it should be and expect to lose some of them.
Your profitable accounts should be adjusted as Todd said.
I don't have many contracts but I just billed a medical office we service twice a year.
I increased the prices 3-5% and sent in the bill.
They never said a word.
FWIW I would add the annual adjustment by 3% line to your contracts.