Easily Double Your Profits
6 Jun 2022 · 1 min
0:42
Mike Andes shows small business owners how price increases drive outsized profit gains. Raise your price from $10 to $12 while costs stay at $8, and profit doubles from $2 to $4.
Mike Andes shows small business owners how price increases drive outsized profit gains. Raise your price from $10 to $12 while costs stay at $8, and profit doubles from $2 to $4.
In your small business. You're constantly looking for levers, things in your business that if you change them slightly, they make massive impacts on the bottom line. Raising your prices is one of the biggest ways to increase your profits. Let's say your product, you sell it for $10 and it costs you $8 to produce, whether it's goods or services. That means you have a 20% profit margin or $2. If you raise your price from $10 to $12. Now your cost of goods is $8 and your margin, your profit, is $4. You actually doubled your profit from 2 to $4. The lower your margins, the lower profit percentages that you have. Raising your prices has a greater and greater impact. And in this case, you had 100% increase or a doubling in your profit just by raising your prices $2.
