Why Every Business Should Revisit Its Pricing at Least Once a Year

One of the fastest ways a profitable business becomes a pressured business is by holding onto outdated pricing. Costs move, project demands shift, compliance increases, and expectations rise, but the price list stays the same. The result isn’t immediate; it shows up slowly as tighter margins and a sense of working harder without earning more.

A 12-month pricing review helps prevent that slide. It ensures your pricing reflects today’s conditions, not last year’s assumptions, and gives you the confidence that each job or service is being delivered at a sustainable margin.

Here are some of the top reasons you should revisit your pricing. 

Your operating costs shift quietly in the background

Most businesses don’t experience one big jump in costs, they experience dozens of small ones. A supplier adjusts a rate. Insurance renews slightly higher. A new compliance requirement increases admin time. None of these changes feel dramatic at the time, but together they shift the cost base of your business. Many owners only realise the impact when profitability feels tighter, long after the change has happened.

Here’s an example of some of the business costs that have increased recently:

Staff wages: Most modern awards increased on 1 July, and the national minimum wage rose again. Businesses are also dealing with higher superannuation contributions since the rate went up to 12% on 1 July 2025.

Insurance premiums: Liability, cyber, property and management-related policies have all risen as insurers respond to higher litigation costs, more frequent cyber incidents, and increased weather-related claims.

Energy costs: Electricity and gas prices have increased across several states, particularly for commercial users.

Supplier costs: Importers have raised prices due to supply chain disruptions, global shipping delays, and increased transport costs.

Freight and fuel: Diesel fluctuations, shipping container shortages, and rising domestic freight charges have all pushed costs up for product-based businesses.

Materials: Construction, manufacturing and trades continue to feel increased pricing on timber, steel, and general building supplies.

Software and tech: Many cloud-based platforms announced price rises this year (Microsoft, Xero, MYOB, Google Workspace, Canva, Adobe, CRMs). Even minor increases compound across multiple licences.

Rent and leases: Commercial leases in many areas have remained high.

An annual pricing review gives you the chance to step back and check whether the numbers still make sense. It helps you understand the true cost of delivery, protect your margins, and ensure you’re not unknowingly absorbing costs on behalf of your customers.

Small annual adjustments prevent large corrective increases

A 3%–6% increase each year is far easier for your clients to absorb than a 20% jump after four years of no changes. Yet many businesses avoid adjusting prices out of discomfort, only to find themselves forced into a significant increase later, which is far more difficult to communicate.

A yearly review gives you:

• Space to make small, manageable adjustments
• Justifiable reasons backed by data and performance
• Better client retention due to softer changes

It’s the difference between gentle course correction and abrupt redirection.

Your business today isn’t the same business it was 12 months ago

Every business evolves, regardless of industry. You refine your processes, invest in better tools or technology, upskill your team, and take on work that’s more complex than what you were delivering a year ago. Construction and trade businesses might be managing larger projects with tighter compliance and reporting requirements, while professional service and retail businesses may have expanded their expertise, improved efficiency, or added new capabilities.

All of these changes increase the value you provide, and in many cases, the responsibility and time involved in delivering your work. Yet pricing often stays exactly where it was, anchored to an earlier version of your business.

A yearly pricing review gives you the chance to step back and ask whether your current rates reflect the standard, scope, and capability of the business you’re running today. If your value has grown but your pricing hasn’t, you’re unintentionally limiting your margins and undercharging for the improvements you’ve worked hard to build.

Market expectations and competitor behaviour are constantly shifting

Even if your business hasn’t changed dramatically, the environment around you has.

Your clients’ expectations evolve based on what they see competitors doing, what technology enables, and what becomes “standard” in your industry. Meanwhile, your competitors may adjust their pricing models, reposition their services, or target a different slice of the market.

A yearly review helps you stay aware of:

• Where your pricing sits relative to the industry
• Whether low pricing is accidentally signalling “budget” rather than “quality”
• Whether your packages still match what clients are seeking
• If you’re absorbing costs competitors are passing on

This approach ensures you remain competitive and accurately positioned amongst competitors.

How to complete a practical annual pricing review

A thorough yet straightforward pricing review should consider:

Costs and margins

• What is the real cost to deliver each service?
• How have wages, materials, administration, and overheads changed?

Capacity and workload

• Are you at (or beyond) capacity?
• Are some services more demanding than others relative to their price?

Client behaviour

• Which clients require more time, revisions, or support?
  Are certain services routinely underquoted?

Market factors

• What are competitors charging?
• Has the industry shifted toward different bundles or delivery models?

Business goals

• Do you want to grow, consolidate, hire or pivot?
• Is your pricing helping or hindering those plans?
  
  

A good annual review checks the numbers and aligns your pricing with your strategy.

We’re here to help

Annual pricing reviews protect your business from hidden cost creep, mismatched value, weakened margins and cash-flow strain. They ensure your pricing reflects the business you are today, not the version you were years ago.

For many businesses, the hardest part is getting started. At Bonerath & Co., we can help break down the numbers, assess your true margins, and guide you through a pricing approach that supports long-term sustainability.

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