{"id":12875,"date":"2022-06-01T00:00:00","date_gmt":"2022-06-01T00:00:00","guid":{"rendered":"https:\/\/www.scotwork.com\/nz\/blog-nz\/leaders-is-it-time-to-raise-prices\/"},"modified":"2022-06-01T00:00:00","modified_gmt":"2022-06-01T00:00:00","slug":"leaders-is-it-time-to-raise-prices","status":"publish","type":"post","link":"https:\/\/www.scotwork.com\/nz\/blog-nz\/2022\/leaders-is-it-time-to-raise-prices\/","title":{"rendered":"Leaders: Is it time to raise prices?"},"content":{"rendered":"
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There\u2019s no denying what\u2019s happening in the marketplace: much of China is still in lockdown, which is disrupting supply chains everywhere; sanctions against Russia are limiting oil supply in the world market; the Fed is raising rates; and the stock market is shedding value daily as both the Dow Jones and NASDAQ near 52-week lows. All of which is contributing to an inflation rate of 8.5%. It begs the question: Is it time to raise prices?<\/p>\n

For some businesses, there may be no other choice. In particular, businesses that rely heavily on human capital have been forced into a position of paying higher wages to retain talent. When labor is the majority of your cost model, trimming overhead is your biggest lever to pull in order to maintain margins. However, most unessential-personnel trimming happened during the pandemic, and there may be no more to cut, so the only option, at this point, is to raise prices in order to maintain operational sustainability.<\/p>\n

Other businesses dealing with supply chain shortages may have to raise prices because volume selling won\u2019t help their bottom line, since there\u2019s limited volume to be had. Instead, they have to make the most out of every sale \u2014 and that might mean raising prices to temper demand and maximize every sale opportunity.<\/p>\n

Then there are businesses whose products and services aren\u2019t as hampered by labor shortages or supply chain outages. For example, the travel industry. While airlines and hotels were especially hard-hit during the pandemic, they\u2019re starting to come back in areas where COVID\u2019s impacts are subsiding. In these markets, their businesses are in high demand, and some are using this moment as an opportunity to make up for lost revenue over the past few years.<\/p>\n

These aren\u2019t the only reasons for raising prices, but all of us will be dealing with price increases \u2014 either by giving them or receiving them. Here are some thoughts on how to deal with either situation.<\/p>\n

Giving a Price Increase<\/strong><\/p>\n

Every business\u2019 timing and reasoning for its price increase will vary, but here are some tips for putting you and your team in the best position possible when rolling one out:<\/p>\n