The Price Break Is Over
In the fall, many companies—large and small—held off on price hikes or even offered discounts. That changed in January.
Good morning!
Here are today’s highlights:
In our latest podcast, the owners answer a barrage of questions—and offer an intimate view of what it takes to build a business.
Madison Avenue may be in crisis, but many smaller ad agencies in the heartland are thriving.
Irony alert: A consulting firm that helps businesses with finance and credit issues takes multiple merchant cash advance loans.
You think you’re struggling with succession? Imagine if your family business were a farm.
PRICING
After holding the line for several months, companies large and small are jacking up prices again: “Companies had raised prices last year after tariffs hoisted costs. Yet starting in the fall, many firms held off on increases and sometimes offered discounts to capture holiday shoppers. The pricing break is over. Many companies typically raise prices at the start of the new year. Yet increases appeared to be stronger than normal for January for electronics, appliances and other durable goods, said UBS economist Alan Detmeister. Some companies have pointed a finger at tariffs for their increases, while others, especially small businesses, also blame higher wages and hefty health-insurance costs that firms said they can’t absorb or share with suppliers.”
“Prices on the most affordable imported goods are up by 2.3 percent since dipping at the end of November, according to data through Feb. 10 collected by Alberto Cavallo, a Harvard Business School professor who tracks daily online prices at major U.S. retailers. The Adobe Digital Price Index found that online prices posted their largest monthly increase in a dozen years in January, driven by higher prices for electronics, computers, appliances, furniture, and bedding.”
“More than half of small business leaders said they planned to increase prices in the next three months, according to a December survey of 600 entrepreneurs by Vistage Worldwide. Nearly 70 percent planned increases of 4 percent to 10 percent, while another 10 percent forecast increases of more than 10 percent, according to the business coaching and peer-advisory firm.”
“Atomic Object, a Grand Rapids, Mich.-based digital software consultant, raised the hourly rate it charges its customers to $200 this year, after boosting rates to $195 an hour from $180 an hour at the end of 2024. ‘We tested the market at $195 and said we would hold here,’ said Jeff Williams, a managing partner. ‘But increases in salaries and benefits are driving expenses higher and higher.’ The company’s health-insurance premiums jumped by 14 percent this year after climbing by 12 percent in 2025, and now equal nearly 10 percent of revenue, up from about 5 percent three years ago.” READ MORE
THE 21 HATS PODCAST
Hot Seat: Three Owners, No Easy Answers: Sometimes the best conversations start with a simple question—and then another, and another. This week, we put Kate Morgan, Jaci Russo, and Ted Wolf in the hot seat and fire away: Are you hiring? Are you finding impressive job candidates? What was the worst job you ever had—and did you learn anything from it? Have you bought crypto? If you had $10,000 a month to spend on marketing, where would it go? Should a marketing agency ever turn its marketing over to another marketing agency? What’s holding you back? What’s the simplest thing you’ve never quite figured out how to do?
None of these are trick questions, but they don’t necessarily have easy answers. Kate admits she’s never opened her accounting software. Jaci says one of the best things that ever happened to her was getting fired. Ted recounts losing 40 percent of his company’s revenue in a single weekend. Running a business means living with trade-offs, uncertainty, and the occasional punch to the gut. As Jaci reminds us, it usually works out—one way or another. But that doesn’t mean the answers are simple when you’re in the middle of it.
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