Economists are talking of recession; I'd prefer to talk about inflation.
In simple terms, economic inflation has been defined as, "Too many dollars chasing too few goods." You'll agree with me this past winter had heavy demand pulling on all of the items listed above which were in a shorter than normal supply.
To avoid having your eyes glazing over while reading a dissertation on economics and an explanation of why, I offer the following simple point. If your costs of operation for boarding, lessons, training, breeding and transporting have increased at wild inflationary rates, you need to increase the fees you charge to compensate for it.
Note, I didn't write work harder and faster and get more customers, I wrote increase your fees.
Raising rates is a subject that makes many professional horsemen as jittery as a two year old horse at a hot air balloon rally. Something is going up, but the method and the noise is pretty scary.
Often, fear of losing customers overrides the fear of your business's financial failure.
If you believe the primary purpose of a business is to make a profit, then you should be more concerned with how you will pay for gas, groceries and the truck payment than whether your clients will leave you in search of lower prices and fees for boarding lessons and training.
When you raise your rates, I won't deny you'll lose some business. Some folks just won't or can't pay any more. That's the sad reality that you have no control over.
But, most business owners wait much too long before they raise rates. They are optimistic that things will change for the better. That is always a possibility. And you can lower your prices if that happens. In the mean time, every day of escalating costs and your same old prices just means you lose more.
Price and fee increases can be dealt with in ways that cause minimal stress to your clients and customers. There are even ways of "softening" the blow to your clients. I'll be writing about them in next week's newsletter.
If you have tips of your own that you'd like to share on how to strategically and tactfully raise fees and prices, please e-mail click here or call me at (716) 434-5371 and tell me about them. I'll include them in the newsletter.
If you haven't started already, begin analyzing the impact to your business from the big price squeeze and get ready to take the right action for your business. More on pricing in next week's newsletter about ways to adjust pricing, packaging and benefits for staying profitable.