Podcasts Business Profit Is A Choice How to Determine When to Raise Rates and When to Absorb Costs

How to Determine When to Raise Rates and When to Absorb Costs

Published: April 2, 2023, 10 a.m.

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225: How to Determine When to Raise Rates and When to Absorb Costs

WITH MICHELE WILLIAMS

As a business owner, one of the biggest challenges you face is managing your pricing strategy in response to fluctuating costs. Pricing is a crucial element that can determine the success or failure of a company.\\u202fOn the podcast today we will explore how to manage this in your business.

Topics Mentioned:\\xa0

  • Cost management\\xa0

  • Brand promise\\xa0

  • Pricing structure\\xa0

  • Strategy\\xa0\\xa0

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Key Thoughts:

  • Setting the right price for products or services is essential to ensure profitability, but sometimes external factors can lead to higher costs that may require a company to make tough decisions. Michele (1:03)\\xa0

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  • When you begin to incur higher costs as a business owner, one viable option is to adjust pricing accordingly. Increasing the price of products or services can help offset the additional expenses. Michele (1:59)\\xa0

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  • When facing higher costs, you have the option to absorb the additional expenses and reduce profitability. This can be a difficult decision, as it may lead to short-term losses, but can lead to long-term benefits.\\u202fMichele (3:59)\\xa0

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  • There is a sweet spot for every business which might mean a minimal increase in pricing along with internal expense reduction strategies to mitigate loss of profitability. Michele (5:25)\\xa0

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