I Can’t Just Raise My Prices

By Mike Maddaloni on Friday, March 21, 2008 at 09:56 AM with 3 comments

Oh, if I could only just raise my prices.

If business is slow and I don’t have any new prospects or projects, I could just raise the prices I charge my current clients. And even if I do have enough business, I could still raise prices each time I send them an invoice, as that would surely increase my revenue. Well, for a short period of time, as eventually my clients would become suspect of what I was doing and look elsewhere. And its not that I would be changing my services or products, I would just be charging more for them.

As you might have guessed, the preceding was sarcasm. And if you didn’t guess that, it was! Ask any entrepreneur and as much as they would love to do that, the reality is that would never work, and clients and customers would surely leave. Instead, we strive to continuously add value through new and improved products and services, continuously seek out new clients and customers and work feverishly to keep costs down. Call it the independent spirit, or just call it the reality of the world.

Why restate the obvious? As much as I try to keep The Hot Iron non-political and solely focused on tech and business (and when I do stray I get reminded of why I strive towards this), when small businesses are impacted I am compelled to address it. The sales tax in the city of Chicago will be increasing to 10.25%, the highest in the nation. For those who don’t know, the sales tax in the Windy City is comprised of 3 portions, for the city, Cook County and the state. The city portion is increasing a quarter percent and the county portion will increase 1 percent, with the money going to bailout debt-ridden public transportation and hospitals. However nowhere in these increases are there any cost-cutting or efficiencies or increases in services. This Wall Street Journal editorial on the tax increases said it best, “…the county is "not only refusing to tighten its belt, it's acting as if it doesn't have to wear a belt." Then again, it'd be business as unusual if patronage were somehow extracted from Chicago's machine politics. Too bad for the city's actual businesses and residents.”

Yes, too bad indeed. And as easy as it would be to just raise my prices, it’s more fun to run with the independent spirit, even if it takes me elsewhere.

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