Passing It On to Them

Dear Dave, I run a small, family catering business. We make everything from scratch, and we specialize in corporate events. Our problem is that the cost of eggs, butter and flour has more than doubled in the last few months, and some of our best customers are having trouble with the increased price we're asking for our services. How can I make them understand that we're not just padding our own pockets? Grace Dear Grace, It takes money to keep the sweet rolls sweet, doesn't it? If I were you, I'd show them your invoices and let them see for themselves what you paid for eggs and other ingredients a few months ago, and what it costs now. The key is to give them a "why" along with a "what." Both you and your competitors are being affected by the increase in prices, Grace. Some of the bigger companies may be able to eat the increase for a little while longer, but they're using the same stuff you are, and eventually it's going to come home to roost for everybody. In situations like these, a price increase is almost always handed down to the consumer. Seems to me you've got two choices. You can either raise your prices a little bit and explain why, or go broke! - Dave
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