I was speaking to an accountancy client this week about their business - they are new to our business and this is their first step into the world of business growth coaching.
After we had chatted through their business - they have some very interesting clientele - I asked a question that I thought would sit quite easily,
What is you average customer annual spend?
And the answer they gave me seemed low.
Very low actually - based on other accountants we have worked with.
So I dug a little deeper.
And it turns out that they hadn't implemented a price change since April 2024 and that was the first one for three years!!
Now let me be clear - the business is healthy, the service looks good (although the offerings are very broad - something we will be rationalising soon!) and the owner is clearly in control.
However no price rise for 12 months and then none before that since 2021!
So I asked when the next one was due and she told me that she was investing partly in our services so we could help her to implement this asap.
WHAT??
She was deferring a price increase to seek advice first, rather than have regular annual, or six-monthly updates to her charges.
So I asked her what her feelings are about the increase in National Insurance Contributions, set for April 1st - she has her team on payroll - and she had no plan to cover this increase in her cost, other than to further erode her profits to cover this.
As an accountant, her view was that it was hard to increase prices as she spends her time helping her clients spend less - so this didn't sit well with her.
And that is the challenge for a lot of business owners (although I have never had this situation with an accountant we have worked with!)
It is important that you are regularly reviewing your prices and reflecting that with your communication with your customers.
Personally, it appears every week when I go shopping, the same basket of goods costs me more - so as a consumer, whilst we may not like it, we know prices are going up.
So review your costs, ensure you are reflecting the changes in your prices (at least annually) and communicate with your customers ahead of major changes - don't just drop them on them!
Speak soon!
James