You raise your prices when the demand for your services is too high for you to supply.
Supply & Demand are economy strategy basics, to understand how this works inside your business you have to understand, both supply, (your services) and demand, (the need for your services) should never be equal.
Demand: How much is your service desired by customers ..
Supply: Your service at your price..
So here’s how it works: You’re one man with two hands and only so much time in one day. When you’re highly skilled and one of the best in your city - everyone wants to be cut by you. The demand for you allows for you to charge what you want to supply.
For example: If I’m working 5 days a week, cutting 10 heads per day at $25 a cut. BOOKED BY APPOINTMENT ONLY. MAKING $250 A DAY = $ 1,250 A WEEK
Now, I’m in high demand, getting more requests for cuts than I can physically put in the chair. So I raise my prices, allow the clients that don’t want to pay- to fall off. I do not add extra services to justify raising my prices - I just raise my prices because the demand for me is there.
So now I’m working 5 days a week, cutting 8 heads per day at $35 a cut. STILL BOOKED BY APPOINTMENT ONLY AND MAKING $280 A DAY = $ 1,400 A WEEK
This allows me to either work less and get paid more or work the same and get paid more. Both ways I'm in charge of my business being fully compensated for my services.
Stay tuned, tomorrow I’ll tell you how to get the demand.
- Chuka The Barber