the fear, measured
How many clients could you lose and earn the same?
The fear of raising prices is a fear of losing clients, and it is rarely put next to the arithmetic of losing them. Here is the whole formula: the share of clients you can lose and still earn the same money is the increase, divided by your contribution margin plus the increase.
At a 40% margin and a 10% rise, that is 10 ÷ 50: you could lose one client in five and be no worse off. Every client you keep past that line is new profit for the same work.
One definition, because it decides whether the math is honest: contribution margin is revenue minus the costs that scale with each client (the delivery hours, the product cost, the fees). It is not your overall net margin. Enter a net margin below and the number will flatter you, because your rent does not shrink when a client leaves.
existing clients
Grandfather with an end date.
For the clients you already have, the common paths are: keep them on old pricing forever, move everyone at once, or hold their price for a stated period (six to twelve months) with the end date announced up front. We think the third is the honest middle: it rewards loyalty without quietly building a second, worse business under the first. That is a stance, not a law.
In our experience it is the surprise, not the increase, that costs you clients. Which is why the note matters more than the number:
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Subject: a change to my pricing from [date]
Hi [name], from [date, at least a month out], my price for [service] moves from [old] to [new]. Your current rate holds until then, and if you would like to lock anything in before the change, I am glad to.
The short reason: costs and the level of work have both grown, and I would rather raise this openly than quietly cut corners.
Any questions, just reply: this email is a person.
[your name]
two moves
Work out your break-even line with your contribution margin.
Not the net margin from your accounts: the margin on one more client. If you do not know it, that is the first fifteen minutes, and it is worth them for reasons far beyond this decision.
Pick the date, give real notice, send the note.
A month of notice, a stated reason, and an open door. The founders who regret a price rise almost always regret how it was announced, not the number itself.
straight answers
The questions founders ask about this.
If I raise my prices, how many clients can I afford to lose?
The share of clients you can lose and still earn the same money is the increase divided by the sum of your contribution margin and the increase. At a 40% contribution margin and a 10% price rise, that is one client in five. Contribution margin means revenue minus the costs that scale with each client. Using your overall net margin will flatter the number.
Should I grandfather existing customers when I raise prices?
The three common paths are keeping existing customers on old pricing forever, moving everyone at once, or holding their price for a stated period (six to twelve months) with the end date announced up front. The time-limited version is an honest middle: it rewards loyalty without permanently running a second, cheaper business underneath the first.