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What is your pricing strategy and system for 2025?
Stephen Edwards
February 05, 2025
Profit First Club Newsletter – Pricing & Profitability in 2025
Table of Contents
Hey everyone, Stephen Edwards here from Gro Profit First!
In this week’s edition of the Profit First Club, I want to talk about something that isn’t strictly a Profit First principle but aligns perfectly with its core philosophy: making profit a priority in your business.
We all know the phrase: “Turnover is vanity, profit is sanity.” Yet, one of the biggest mistakes I see business owners make—across all industries—is not staying on top of their pricing strategy. Even accountants (who you’d think would be on top of this!) often struggle with pricing.
So today, let’s break down why pricing is critical, how small changes can massively impact your profits, and what you need to do in 2025 to ensure you’re charging what you’re worth.
1. If You Haven’t Raised Your Prices in the Last Year—You Need To!
With inflation continuing to rise, if you haven’t reviewed your pricing in at least 12 months, you’re effectively giving your customers a discount without realizing it.
For example, if inflation is 10% and you haven’t increased your prices, you’ve just handed every client a 10% discount—without them even asking for it! That directly erodes your profit margins, making it harder to grow and reinvest in your business.
The key takeaway? Regular price increases should be a normal part of your business.
2. The True Cost of Discounting
Let’s say you charge £100 per month for a service, and a customer negotiates a £10 discount. That might not sound like much, but if your profit margin is 20%, you were originally making £20 profit.
• After a £10 discount, your profit drops to £10.
• That’s a 50% cut in profit, meaning you now need double the customers just to make the same money!
Discounting is often a race to the bottom—and most businesses don’t win that race. Instead of lowering prices, focus on adding value so that customers are happy to pay what you’re worth.
3. Stop Competing on Price—Compete on Value
A lot of business owners worry about competitors charging less. But unless you’re selling a commodity, your customers aren’t just buying on price—they’re buying on trust, expertise, and value.
Think about what makes your business unique.
• Do you provide exceptional service?
• Do you offer specialist knowledge?
• Do you have a unique method or system (like Profit First)?
If you’re offering something different, you don’t need to be the cheapest—you just need to be the best at what you do.
A great book on this is Blue Ocean Strategy, which explains how businesses can move away from crowded, competitive markets (red oceans) and instead create their own niche (blue oceans) where price isn’t the main battleground.
One example? Cirque du Soleil. They completely reinvented the circus, offering a premium experience that people were happy to pay double or triple the price for. That’s the power of positioning.
4. Pricing Isn’t a One-Time Thing—It’s an Ongoing Process
Many business owners set their prices once and forget about them for years. But pricing needs to be reviewed regularly—monthly, quarterly, or at the very least, annually.
Here’s what you should be tracking:
✅ Inflation & Cost Increases – Make sure your prices keep up with rising expenses.
✅ Profitability by Service or Product – Focus on your most profitable offerings.
✅ Market Positioning – Are you still delivering unique value?
✅ Customer Feedback – Are clients happy with the price based on the results they’re getting?
Final Thought: Are You Pricing for Profit in 2025?
Pricing isn’t just a finance decision—it’s a business strategy.
• Are you charging what you’re worth?
• Are you positioning yourself based on value, not price?
• Do you have a plan to increase your prices in 2025?
If you found this useful, hit reply and let me know your thoughts. And if you have any questions on pricing, profit margins, or Profit First, I’m happy to help!
Until next time,
Stephen
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