This week we are playing “what if”. (I’m feeling CHEEKY.) Yesterday, we pondered the “what if” possibility of slashing our advertising budgets. Today, let’s try another one…
What if you RAISED your PRICES by 20%?
Now, my theory is that a majority of businesses in the wedding industry are under-priced. Even if you are appropriately priced (which means you are not “low balling”) you are most likely not pricing at level that is in line with the quality and value of your service or produce. So, I often ponder, “What if everyone in the wedding industry priced according to the real value of what they do? What if people raised prices by 20? What if people were confident in themselves to ask for what they deserve?”
Let’s do a little math (no, don’t turn off that browser… this is where it gets REAL):
Let’s say the average price of your service is $3000. And, let’s say your costs are $500. So now, your profit on each wedding is $3000-500 = $2500. And, let’s say you want to make $50,000 as your annual income. You will have to do 20 weddings (or $50,000 divided by $2500.)
Now… let’s raise those prices by 20%:
A 20% increase in your price would be $3000 x 20% = $600. Not too bad. Not too much of an increase. I think the customer could handle that.
So, now your average price is $3600. Your costs are still $500. Now your profit is $3600-500 = $3100. You still want to earn $50,000 for the year. At this pricing, you would have to do 16 weddings (or $50,000 divided by $3100.)
WOW! Do you see how powerful that is?!
By raising your prices by only $600, you would have to do 20% less work… 4 LESS weddings… to achieve the same earning as before. What does freeing up your time by 20% allow you to do? Grow your business in other ways. WORK ON THE BUSINESS, not just IN THE BUSINESS. Or, hell, take a vacation!
We are all working too hard for too little.
A small increase in price can have a huge effect on your earning potential.
Wow… what if we increased our prices? WHAT IF?