It’s impossible not to notice rapidly rising costs of, well, everything. The pinch of inflation is showing up everywhere- in your grocery carts, your gas tanks, in your costs to ship packages- everything you do and buy is more expensive right now than it has been in 40 years.
Prices on supplies, gas, shipping, and more are increasing at such a rate that is going to affect your business’ profitability if you do not work these costs into your business.
These rising costs are affecting every facet of your lives, including your photography business profits.
Read on to learn what these consumer price increases, record inflation numbers and smaller bank balances really mean for your photography business- and what can you do to offset them.
Inflation has been increasing significantly over the past two years, and is predicted to continue increasing throughout 2022. Here are some of the ways you may see your business be affected by rising inflation.
If you don’t adjust for inflation, you may not be able to hit your profit margins (aka your take home pay!). How can you avoid this, or at least minimize the damages? By strategically building in the cost of inflation into different parts of your business.
Start by taking stock of what costs have increased in your business and adjust your pricing accordingly
When you are raising your prices consider the following:
Raising prices might seem scary, but it is necessary to adjust your prices during inflation if you want to make a profit in your business. Here are some things to consider as you raise your prices and communicate increases with your customers.
In the Inc.com article, “Why it's Time to Think About Raising Your Price,” author LJ Suzuki writes:
“The right pricing strategy will depend on your business and your industry. I recommend performing a full competitive pricing analysis to determine the best course of action. If you do not have the time or resources for a full pricing analysis, here's a rule of thumb:
If there are shortages in your industry, you should raise prices.
That statement applies to well over half the economy right now, so odds are now is the right time to raise prices.”
Sound advice and a helpful perspective on a subject that many photographers find uncomfortable to address, implement, and communicate.
When inflation rises, the purchasing power of your clients also erodes - in simple terms, they can now buy fewer goods and services than they used to. This means we have to find the balance between offsetting rising inflation with our clients having less disposable income.
Plan for this by nurturing your current clients to get more repeat clients and referrals, and increasing your marketing efforts. Setting your pricing is not a one and done scenario. Make it part of your business plan to review your pricing and make adjustments as needed each year..
When you are ready to adjust your pricing, we have two articles that can help: