Episode 402: When To Raise Your Pet Business Rates

  Have you ever felt like you’re constantly hustling but never earning enough? Do you find yourself wondering when to raise your pet business rates so you can finally see the financial relief you deserve? In the demanding world of pet services, understanding when to raise your pet business rates is crucial. I talk about it ALL on this episode. The reality of what happens when you don't charge enough, the rising costs of everything in this world, and how this affects your bottom line if your prices are too low. I will share personal stories to illustrate what happens if you don't get this part of your business under control. People legit are going out of business because this subject isn't given enough care and attention. It isn't based off of emotions AT ALL. We’ll explore actionable strategies, from analyzing your profit margins to mastering the art of setting rates that reflect your true value. You’ll learn how to break free from the cycle of financial anxiety and create a thriving business. By aligning your rates with your goals, you’ll attract better clients. Tune in NOW! Timestamps: [00:00] Introduction to the topic of when to raise prices [01:03] Signs it's time to raise prices [06:30] Strategy and Discounts [08:00] 30/30/40 Method [09:30] Mathematical pricing vs. emotion-based Notable Quotes: "If your business is constantly running out of money, or you are constantly wondering if your card is going to get declined, then you're doing something wrong here, because most likely, you're probably working yourself like a dog, pun intended." "If you're giving discounts off your initial price rather than an already inflated price, you're potentially undercutting your business's value." "It should be a mathematical equation with a strategy that you employ." Resources: Pricing Structure & Strategy Class Jump Mastermind Did you love this episode? Make sure you never miss an episode! Head over to Apple Podcasts or Spotify to subscribe to Bella In Your Business. Transcript: Welcome back to another episode of Bella in Your Business. My name is Bella Vasta, and today we're going to talk about when it’s time to raise prices. This is probably one of the most popular topics I see discussed in Facebook groups, and it’s an important one. Raising prices isn’t just about making a quick decision to increase your rate by a few dollars. It's a more complex process that should involve careful consideration. Today, I want to guide you through a thought process that might be a bit uncomfortable because it involves money, which is often tied to our sense of worth and value. Some people choose to raise their prices every year, which is fine, but are these increases aligned with inflation or simply based on feelings? If you're making pricing decisions based on emotions rather than strategy, you might not be setting yourself up for success. I’ve even created a class on this topic, the Pricing Structure and Strategy class, because there is both a structure and a strategy to consider when setting your prices. One of the biggest mistakes I see is setting a price and then discounting it, which essentially takes profits out of your own pocket. So, when is it time to raise prices? It’s definitely a daunting decision, but there are clear signs to look for. For instance, are you or your business living paycheck to paycheck? Your business and personal bank accounts should be separate, and you should be doing draws or paying yourself a paycheck depending on how your business is set up. If your business is constantly running out of money, or if you're constantly worried about your card being declined, it's time to rethink your pricing structure. If you're working tirelessly but still living paycheck to paycheck, it indicates that your current rates aren't sufficient to cover your living expenses and business costs. Another important factor is profit margins. If your business isn't making at least a 20% profit on revenue over $400k or 30% on revenue under $400k, it's time to reconsider your pricing strategy. Healthy profit margins are essential for covering operating expenses, reinvesting in your business, and ensuring long-term viability. Insufficient profit margins can hinder growth and sustainability, putting your business at risk and potentially leading you to work even more, which can affect your personal life. It’s also crucial to assess whether your business can afford its needs and wants. If you’re struggling to purchase necessary equipment or invest in marketing, it’s a clear sign that you need to raise your prices. Your business should have the financial flexibility to support its ongoing needs and future growth. Another red flag is neglecting your personal savings. Your business should enable you to save for personal goals, emergencies, and future financial security. If your current pricing strategy forces you to neglect these personal savings, it’s time to take action. Additionally, your pricing should align with your personal and business goals, whether it's expanding your offerings, hiring additional staff, or achieving a work-life balance. If your current rates aren’t supporting these goals, an increase is necessary. One big factor to consider is your discount strategy. If you’re giving discounts off your initial price rather than an already inflated price, you’re potentially undercutting your business’s value. For example, if you start with a rate of $30 but know that you can operate your business on $25, you can offer discounts strategically. This gives you extra wiggle room for taxes, insurance, and even raises. If you’ve taken my classes, you’re familiar with the 30-30-40 method, which I've been preaching since the beginning of time. This means allocating 40% to pay your people, 30% to yourself, and 30% back into the business. If you're trying to increase client frequency, for instance, by encouraging clients to book walks multiple times a week, consider offering a rate cut for more frequent services. There’s a strategy behind pricing, and it’s not just about raising rates. You need to decide whether you want to be the most expensive, average, or competitive in the market. If you’re priced in the middle, you need to ensure that your processes and customer experience are smooth and efficient to attract and retain clients. In the end, pricing is not just about raising rates; it’s about ensuring the financial health of your business and aligning it with your goals. This episode is shorter because I don’t want to overwhelm you, but I want you to think carefully about your pricing strategy. Don’t just raise your rates because it’s a new year or because you feel like it. Make it a calculated decision based on a clear strategy. I’d love to hear your thoughts on this topic, so feel free to reach out to me wherever you heard this episode. You can send me a DM or an email at bella@jumpconsulting.net. In the show notes, I’ll include the class I mentioned earlier. If you’re ever confused about pricing or don’t like dealing with money and spreadsheets, there’s a better way to handle it, and I encourage you to grab that downloadable class. We also dive deep into finances every year in the Mastermind, with over six months' worth of material available. You can join us at jumpconsulting.net/mastermind, and remember, there are no contracts—it's month to month, although many people stay for a long time. This has been another episode of Bella in Your Business. Remember, when life gets you down, always keep jumping!