Last week I made the case for raising your prices, and I finished on the part that actually stops people. Being two years behind on pricing is uncomfortable. Being ten years behind is terrifying, because by then the gap has grown large enough that correcting it properly feels like an act of aggression against people you have known for a decade and genuinely like. That is where a lot of owners are sitting right now. The answer is that you do it once, you do it deliberately, and you do your homework before you send a single letter.
Let me start with my own mistake, because it is the expensive one and it is almost never the one owners are worried about beforehand.
When I finally worked up the nerve to raise prices in my own business, I picked the number I could say out loud without my voice going funny. My costs justified a good deal more than that, though I had no way of knowing it at the time because I had never done the arithmetic. It felt responsible at the time. It felt like I was being considerate of my customers, and it let me get the conversation over with. Then I went back and costed the thing out properly a year or so later, discovered the increase had not even caught me up to where I should have been before I started, and had to go back to the same people and do it all over again. Two increases inside eighteen months, the second one arriving while the first was still fresh in their minds.
That second increase cost me more than the first one ever gained me. An uninformed ten percent followed by another ten percent when you discover the first was not enough is far worse than a single twenty percent would have been. Your customers will absorb one significant increase from a supplier they trust, particularly one who has held prices steady for years. A second one arriving hard on its heels tells them something about you that the first did not. It tells them you have no firm grip on your own numbers. Every conversation you have with that client afterwards, on scope, on renewal, on anything, carries that piece of information in the background. You get one good swing at this. Take it properly.
Which brings me to the homework, and there is no version of this where you skip it.
Cost out one representative job, all the way through, at today's numbers. Today's wages, at the rate you are actually paying people this year. Today's subcontractor and supplier rates. Today's insurance, your real vehicle and fuel costs, the software you have accumulated since the last time anybody sat down and looked. Include the rework you actually do, and go and count it, because the allowance you carry in your head for that is smaller than the true figure in every business I have ever been inside, including my own. Then load your overhead across it honestly and add the profit the business needs to be worth owning. What comes out the other end is the price that job should carry.
That number is usually higher than the one you would have had the nerve to choose. That is precisely why you calculate it. The arithmetic takes the decision out of your stomach and puts it on paper, which is the only way most of us ever arrive at a number that is actually right.
Do the same exercise at the level above the individual job. Margins vary enormously by industry, so find out what normal looks like in yours. Your instinct on that question is calibrated to prices you set years ago, which makes it the least reliable tool in the building. Gather what competitive information you can get your hands on legitimately. Then go through your larger customers one at a time and work out what each of them actually delivers, with every cost loaded in. I have written before about the number most owners avoid, and this is where that number pays for itself, because a general increase applied across a book you have never examined will leave your worst accounts underwater and your best accounts subsidising them, which is roughly where you started.
When you have the numbers, one more decision to make before you communicate anything. Everybody moves on the same stated date.
I understand the temptation to phase it. You start with the clients you feel least awkward about, you leave the two difficult ones for later, and you tell yourself you will get to them. Running two price lists in a single market gets found out, and faster than you think. Contractors talk to each other. Buyers in the same sector talk to each other. Somebody mentions a number at a trade show and now you are having a conversation you cannot win, with a customer who is entirely right to be annoyed. A single effective date for everyone is also much easier to stand behind in the room, because it stops being a judgment you have made about that particular client and becomes a decision the business has made.
The execution itself is not complicated, though it does require a bit of spine.
Communicate early, sixty to ninety days minimum. Say it directly, in its own communication, with your name on it. For your larger clients that means a phone call or a visit from whoever owns the relationship, ahead of anything in writing. I have seen owners bury an increase in a line at the bottom of an invoice because the direct conversation felt unbearable, and I understand the impulse completely. Everybody reads that line. All you have achieved is that your customer hears about it first from an accounts payable clerk, and the first thing they feel is that you tried to slip it past them.
Read your contracts before you send anything. If your agreements do not permit an increase until renewal, then renewal is when it happens for those clients, and you build the schedule around that. Breaking your own paperwork to fix a pricing problem you created is not a trade worth making.
Do not apologise for it. Give the increase one reason, grounded in your costs and the service levels you have committed to, state it once, and leave it there. Your input costs and your wages have gone up, and to keep delivering what your customers expect from you, your prices have to come into line with that. The owners who get into trouble here are the ones who over-explain, who write four paragraphs of justification, who manage to convey in every line how sorry they are. All that does is tell the customer the number is soft and invite them to negotiate it. A short, factual, unembarrassed note reads as a business decision, which is what it is.
If you get pushback, stay where you are. If you have done the homework and given real notice, the genuinely justified extensions are few, though probably not zero. Someone mid-way through a fixed-price project they bid on your old rates has a fair point. Someone who simply does not like it does not.
If a customer tells you honestly that they cannot manage the new pricing, treat that with respect. Tell them you understand, offer to help them find an alternative, and give them your best work right up to the last day. This is the same principle I wrote about when it comes to letting a client go: the way you handle the ending is the part they remember and the part they describe to other people. Some of them come back. Most of them will speak well of you either way, which is worth considerably more than the margin you were losing on them.
Then there is the step almost everybody misses, and it is the one that determines whether you are ever back here again.
While the file is still open and the analysis is still fresh, book the next review. Put a date twelve months out in the calendar and treat it as a real commitment. An intention gets moved every time the week gets busy, and a dated review with your own name against it tends to survive. Build nominal annual increases into your multi-year agreements as a standard term, so the mechanism exists before you need it. Plan on a modest adjustment every one to two years from here.
That is the difference between an event and a schedule. A ten-year gap forms by accumulation. A busy year goes by, then another, nobody owns the review, and the decision gets made by default. A modest adjustment nobody much notices is an infinitely easier conversation than the one this whole article is about, and if you establish the habit now, you never have to have this one again.
Which, having been through the alternative, I would recommend.