Every fall, small business owners around Sarasota, Bradenton, Lakewood Ranch and Venice ask us some version of the same question: should we raise our prices next year? We hear it from service firms, contractors and trades, professional practices, local shops, and real estate brokers and agents.
It's a fair question, and it usually comes with a quick glance at what everyone else is charging. Our answer starts somewhere else. Before you look at anyone else's numbers, look at your own. A price that comes from your books is a price you can explain, defend and live with all year.
Here's how we work through the decision with clients, and how you can start on it this month.
What "price" means in your business
For most businesses, pricing is rarely one number. For a service business, it's the hourly rate, the monthly retainer or the flat fee on your most common engagement. For a trades business, it's the labor rate, the trip charge, the markup on materials and the price on your most common job. For a professional practice, it might be an hourly rate, a package fee or an annual engagement. For a retail shop, it's the markup on what you sell plus any delivery, service or installation charges. For a real estate brokerage, it might be desk fees, transaction fees or the split on a new agent plan.
Write down every place money comes in. Most owners find two or three prices they haven't looked at in years.
Step 1: Know your real cost to deliver
Start with one unit of work: one job, one client, one sale, one closing or one month of service. What does it actually cost you once you count everything?
- Your time and your team's time, at a fair hourly value
- Materials, parts or inventory that go into the work, if you sell or install anything
- Software, licenses, professional and association dues, and other tools you pay for every month
- Marketing and lead costs spread across the jobs, clients or deals they bring in
- Office, vehicle, insurance and the overhead that is easy to forget
If your bookkeeping is current and categorized, this is an afternoon of work. If it isn't, that's the first thing to fix, because every pricing decision after this one depends on it.
Step 2: Find where the margin is thin
Once you know the cost to deliver, compare it with what you charge. In our experience the problem is rarely everything at once. It's usually one fee, one service or one client type that hasn't moved while costs crept up around it.
For a trades business, that might be a trip charge or labor rate set years ago that no longer covers fuel, vehicles and time on the road. For a service firm or professional practice, it might be a legacy client still paying an old rate for a lot more work. For a retailer, it might be a markup that hasn't kept up with what suppliers now charge. For a brokerage, it might be a transaction fee that no longer covers the compliance and admin work behind each file.
Those are the places to focus. A targeted change on the thin spots often does more than a blanket increase, and it's easier to explain.
Step 3: Run the scenarios
The fear behind most pricing decisions is simple: if we raise prices, people will leave. So put numbers on it.
Build a simple model with three columns: no change, a modest increase and a larger one. For each, estimate how many clients, customers or jobs you might lose, then look at what happens to profit, not just revenue. Many owners are surprised by how few clients they could lose and still come out ahead, because the ones who stay are now paying a price that covers the work.
Run the same model for your costs in 2027. If rent, insurance, software, materials or payroll are going up, a price that holds flat is really a price cut.
Step 4: Give people notice
Timing matters as much as the number. If a change starts January 1, the conversation belongs in November, not on the first invoice of the year.
Tell clients and customers early, explain what is changing and why, and keep it short. People rarely push back on a clear, reasonable change with plenty of notice. They push back on surprises. If you work under retainers, engagement letters, service agreements or, for a brokerage, fee and split plans, put any change in writing well before people make their own plans for the year.
A price you can defend
The goal isn't a bigger number for its own sake. It's a price that covers what it really costs you to deliver great work, leaves room for profit, and holds up when someone asks why. That kind of price comes from your own books, not from the competitor down the street.
If you work through these four steps and still aren't sure, that's normal. Pricing touches cash flow, taxes, hiring and growth plans all at once, and it helps to have a second set of eyes on the numbers.
Plan the whole year, not just the price
Pricing is one piece of a bigger 2027 plan. On December 2 we're releasing The 2027 Planning Playbook, our guide to planning the year ahead for small business owners, from service firms and trades to realtors and brokers. Watch for it on our Playbooks page.
Want help with your 2027 numbers now? Talk with our advisory team and we'll walk through your costs, margins and pricing scenarios with you.