Emotional pricing is the number one reason for small business failure, and fear is the biggest emotion in your studio. Before making any fear-based decisions, you need to make sure your house is in order. Analyzing your revenue, costs, and prices should be an ongoing process, not an annual event. How often do you review your books? Do you know what your overhead rate is? This will fluctuate over time. Do you know what your profit margin is? What is your second largest expense (salary is usually the first)? Do you give discounts? How much have you given away?
There are good discounts and bad discounts. Eliminate all sources of bad discounts before raising prices.
To read the rest of this vital business article, subscribe online or call BREAKTHROUGH at 800-783-7266.