You’ve all heard me say it before…here on this blog on July 26th as a matter of fact, you need to raise prices when your prices go up to maintain your margins and a healthy business. The following excerpt is from my Coffee Article of the Month. It was taken from Specialty Coffee Retailer Magazines October edition, written by Jack Groot, owner of JP’s Coffee & Espresso Bar in Holland Michigan.
â€œâ€¦..As small business owners, we tend to think that if we raise prices, we’ll be looking at an empty store. Just like we think that if we give employees written warnings when needed, they’re all going to quit. We as owners must eliminate the fear, run our business like it needs to be run and not apologize for it.
Is the cost of employment the same for you today as it was last year? In Michigan the minimum wage jumped from $5.15 to $6.95. Has the price of your insurance gone up? How about the coffee you buy? Or how about those milk prices? Does your lease have regular escalations built into it?
So, if most or all of your expenses go up, why aren’t your prices going up?
It’s important to REGULARLY raise your prices. Don’t think of it as, â€œOh my gosh! I can’t hold out anymore. I just have to raise prices,â€ but rather as a normal yearly event. Even if you only raise prices on some menu items or raise prices a small amount, it will put into your customers’ minds that your expenses are constantly going up.
If you lose a few customers, that’s OK. Some may also come less often. The ones that continue to come, and will be most of them, will be a more profitable group of customers, which will allow you to be successful and stick around for the long haul.
We raised our prices at the end of August and, to be honest, had very little feedback.
Don’t apologize. Make yourself a not to review and raise your prices every year and be more profitable!……..”
Wow, way to hit the nail right on the head Jack. I couldn’t have said it better myself. I’ve activated the comment section on this so feel free to poste a comment if you’d like.