Home Small Business How Small-Business Owners Can Raise Prices, Keep Customers Happy

How Small-Business Owners Can Raise Prices, Keep Customers Happy

  • Raising prices is an inevitable part of owning a small business.
  • One founder said that small-business leaders should focus on the value they bring to customers.
  • Open communication is also important, another CEO said. 
  • This article is part of “Small Business Playbook,” a series exploring leadership challenges and the solutions that can drive growth. 

This summer, The Laundry Basket, a mobile laundry and dry-cleaning service, raised its prices between 5% and 10% because of the rising costs of supplies, labor, and fuel, Hyacinth Tucker, its founder and CEO, told Insider. 

“We need all of this stuff for the quality of our business,” she said. “Our vendors were raising prices as well, so we had to go along with it.” 

When the business, based in Washington, DC, notified customers about the price increase via email, the response was “mixed,” with some asking to cancel their service, Tucker said. But most customers were understanding and continued to support the business.

Raising prices is an inevitable part of owning a small business, Danielle Langton, a business consultant who works mostly with women-owned businesses, told Insider. “It’s something that has to happen with time. It’s the natural evolution of a business.” 

While it can be worrisome, Langton said small-business owners should focus on the positives of raising prices — by highlighting the value they bring to customers. 

Here’s how small-business owners can increase prices while maintaining great customer relationships.

Emphasize your value 

Ashley Steele, the founder and CEO of Obtain Creative, has raised her rates a few times since launching the social-media marketing firm in 2020. The main reason she’s done so is to offer its employees competitive pay and attract high-caliber talent.

Her commitment to paying people well ensures the company provides high-quality work, she told Insider. 

To help guide her rate increases, Steele created an organizational chart to determine what roles she needs to fill to meet clients’ needs. She factors in employees’ hourly rates and other costs of doing business. She also conducts market research and talks to others in her industry to see what they charge for similar services.

Headshots of Ashley Steele in a black shirt and white cardigan and Danielle Langton wearing a white blouse.

Ashley Steele, the founder and CEO of Obtain Creative, left, and Danielle Langton, a business consultant.

Sarah Oden and Laura Morsman



“Small-business owners often think there’s so much mystery” around raising rates, Steele said. “If you take the time to do that research and use the data to back up your decisions, you can make really good calls about what you really need to do for the business.” 

Langton encourages her clients to list the value they bring to their customers, including their experience, feedback from other customers, and the results they offer. Then focus on communicating that value when you need to raise prices. 

Communicate openly with customers 

When Tucker raised prices, she emailed customers and posted information on the company’s website 30 days before the increase took effect in August. 

“We didn’t want it to come as a surprise,” she said. “We made sure that we were available during that time to answer any questions and address any concerns that people had.” 

Being transparent builds trust with customers and makes them feel like their relationship with a business is a partnership, Tucker said.

It’s often a good idea to mention why you’re increasing prices, but try to keep it as positive as possible, Langton said. For instance, mention that your business is growing and raising prices will help you continue to exceed customers’ expectations. 

“It doesn’t need to be a sob story or that you’re laying all your cards on the table,” she said. 

Tucker said she explained to her customers that raising prices meant the company could maintain its high quality of service. 

Recognize that it’s part of growing a business

Feeling uncomfortable about raising prices and worrying about how customers will take it is normal, Langton said. Most of the time, customers understand when small businesses raise their prices, but Steele and Tucker say you could lose a few clients because of it. 

But it’s just part of being a business owner and a vital part of scaling up, they said.

“The people who are a good match for you are going to be happy to pay what you’re worth and see the value in that,” Steele said.

Raising prices is necessary to sustain a business in the long term, Tucker said. 

“You have to do what’s best for your company, and sometimes it involves making tough decisions,” she said. “If you come at it with honesty, ready to have those difficult conversations, it won’t be as bad as most business owners think.”