Pricing in a Recession
Well, I'm not running for office right now so I don't mind using the "R" word or bagel as Josh Lyman used to call it on The West Wing. We're trying to deal with the real issues facing legal professionals here at SIC and reality suggests we're nearing a recession.
How should that impact your business? Saw this interesting post including advice from many places entitled, Not a Bad Time for Small Businesses to Raise Prices. Is the title true?
I'm not sure. I've generally kept rates steady on flat fee stuff like some estate planning or residential real estate transactions. I feel like the profit margin on these sorts of things are too thin already to cut prices. However, on things that are generally billed hourly I've been more flexible to drop hourly rates. A good hourly divorce or other litigation matter could be too big of a fee case to let 10-20 dollars per hour lose a client. This was good advice from the article:
If you are going to raise your prices, set them higher than you have to, suggests Karen E. Klein, writing on businessweek.com. That way, if your customers balk, you can reduce the price increase a bit and still end up with the increase you need.
I thought the best piece of advice from the article was this:
“If your competition is busy nursing their recessionary wounds, then you should become aggressive in marketing yourself and your products,” argues Morebusiness.com, a Web site that describes itself as a “one-stop resource Web site for entrepreneurs.”