Home Business: When is the Right Time to Raise Prices?

Many home business owners start out charging less than their peers. As a freelance writer, when I first started out, I made a lot less than I do now. But with experience comes higher pay — I could drop projects that didn't pay well and focus on better-paying clients.

But not every home business owner has the same luxury. After all, if you are selling products or some services, then you have to decide when it's appropriate to raise prices. And right now, even if you are confident that you are worth more, raising prices may not be practicable. Home Biz Notes addresses this issue rather well, I think:

In today’s volatile economy, raising prices may mean losing
customers. People stopped spending in September 2008, and it will take
a lot for them to get going again. They don’t want to pay a lot,
particularly for services, and people know that the cost of living is
not increasing right now, so if your costs aren’t going up, why are you
raising your prices?  What a dilemma!

An article a few years ago in Entrepreneur Magazine
suggests raising prices when it will have the least impact or be least
noticed.  That is, when people are in the mood to buy.  If you have a
seasonal business, increasing your prices at the beginning of the
buying season might be expected and less resisted.

You can see that there is a range of thought on the issue of when to raise prices for your products and services. In the end, though, it comes down to what your customers and clients expect — and are willing to pay.