Most Businesses Are Raising Prices

Even if your customers expect the hikes, there are strategies that can soften the blow.

Good Morning!

Here are today’s highlights:

• “I could lose my home,” says Beth Anne Benike, an Army veteran who the SBA is honoring as Minnesota’s small businessperson of the year.

• With the Trump administration racing to negotiate with more than 70 countries, the uncertainty continues to build.

• Lou Mosca says that even in tough times business owners need to look in the mirror.

• A year later, the debate about California’s $20 fast-food minimum wage rages on.

PRICING

Most companies are prepared to raise their prices: “Nearly three-quarters of business leaders surveyed by Resume Templates said they plan to increase prices at some point by the end of the year, with about 25 percent of those respondents saying they are doing so immediately. Additionally, 38 percent said they plan to freeze hiring, while one-third say they plan to delay raises or bonuses to account for the extra costs. The survey also found 18 percent of respondents said they plan to re-shore at least some of their operations or imports.”

• “Some good news? Customers expect change, said Craig Zawada, chief visionary officer at dynamic-pricing firm PROS Holdings Inc. ‘Today there is more of a window to make changes to your pricing than there has been before,’ Zawada said, noting that customers largely are expecting price increases from the flurry of recent tariff activity. ‘Businesses can use this as an opportunity not just to pass along costs, but to rebalance and make changes for things that they have wanted to adjust for a long time.’”

• “Michelle Nguyen, marketing manager at UpPromote, said by choosing goods or services that are a smaller portion of overall sales, a business owner can see how people react without putting all your eggs in one basket. ‘If they don't care, you can go ahead and raise prices for everyone. If they argue, you can change your plan or even cancel it with little trouble,’ Nguyen said. ‘Costs are going up because of tariffs, and you need to pass some of that on to the customer. This is a low-risk way to investigate the market.’”

• “Businesses can balance price increases with new packaging, delivery, or other services, including new features, said Garth Hoff, a pricing expert from Pricefx. That could mean crafting a new ‘bundle’ of products or services that provides some value and makes it harder for the price increases to be challenged. ‘Raising prices in the wake of tariffs is a complex task that requires both sensitivity to customer needs and a clear strategy for sustaining profitability,’ Hoff said. ‘Small businesses that approach this challenge with transparency, creativity and a focus on delivering value will not only navigate the storm but come out stronger.’” READ MORE

INTERNATIONAL TRADE

The SBA named Beth Benike Minnesota’s smallbusiness person of the year. Now she fears she will lose her home: “The Minnesota veteran invented a placemat with bungee cords that hold toys or utensils, keeping them off the floor when babies toss them. It’s one of several products she created for Busy Baby, a company she runs with her brother. They are manufactured in China. She expected and budgeted for about 20-30 percent tariffs this year. When the first round of tariffs came in at 10 percent, it was manageable. Then the rate on China crept up, then up again, to 54 percent. That was her ‘Oh, shit!’ moment, but she thought she could weather it, she told the Guardian. It didn’t stop there, though. It climbed up to 104 percent. She filmed a video of herself ‘mid-meltdown’ over the extreme tariff, posting it on her social media.”