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If you’re not making 3%-6% increases in price annually, you’re not even keeping up with inflati

In 2017, if you sold something for $100, that was your only product, and you were running 20% margins as a business, if you did not change your price from 2017 until 2024, [music] that $100 now means that your costs in that business have gone up by 20%, which means that your profit is now zero. >> [music] >> And so, if you feel like your margins continue to compress year after year after year, it's usually because you're not appropriately adjusting [music] your prices.

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Key takeaways

  • In 2017, if you sold something for $100, that was your only product, and you were running 20% margins as a business, if you did not change your price from 2017 until 2024, [music] that $100 now means that your costs in that business have gone up by 20%, which means that your profit is now zero.
  • And so, that would be like you going back in time where you had a 20% margin business and running it at a $79 price point rather than a $100 price point.
  • And so, you just like that eliminate all the profit in the business.
  • And so, you have to do the reverse of that because inflation is a compounding threat to your business that every year stacks on top of itself.

Chapters

  1. 0:00
    Abschnitt 1 In 2017, if you sold something for $100, that was your only product, and you were running 20% margins as a business, if you did not change your price from 2017 until 2024, [music]
  2. 0:27
    Abschnitt 2 >> [music] >> in 2017 is the equivalent of $100 today.

Full transcript

Locally archived YouTube transcript with timecodes. Speakers are assigned heuristically and may be corrected editorially.

2 segments

0:00In 2017, if you sold something for $100, that was your only product, and you were running 20% margins as a business, if you did not change your price from 2017 until 2024, [music] that $100 now means that your costs in that business have gone up by 20%, which means that your profit is now zero. >> [music] >> And so, if you feel like your margins continue to compress year after year after year, it's usually because you're not appropriately adjusting [music] your prices. So, to give you context, $79

0:27>> [music] >> in 2017 is the equivalent of $100 today. And so, that would be like you going back in time where you had a 20% margin business and running it at a $79 price point rather than a $100 price point. And so, you just like that eliminate all the profit in the business. And so, you have to do the reverse of that because inflation is a compounding threat to your business that every year stacks on top of itself. And so, if you're not making 3, 6% increases in prices at least annually, you're not even keeping up with inflation.