Still Charging 2015 Prices? Here's What That's Costing Your Business
As a business owner, you need to get comfortable raising your prices. Not because you should charge more just for the sake of it, but because the cost of running a business doesn't stand still. And if your expenses keep going up while your prices stay the same, you're putting yourself in a worse financial position every year.
I recently watched Graham Stephan's video, "Americans Are Running Out of Money," which puts some numbers behind just how much pressure rising costs are placing on Americans.
He talks about housing, food, insurance, transportation, and the growing difficulty people have saving money.
There's another side of that conversation that I think business owners need to pay attention to.
You're not just a consumer dealing with those increases. You're also running a business that has to pay employees, buy materials, carry insurance, pay rent, and cover dozens of other expenses.
And unlike an employee who might receive periodic raises, nobody automatically adjusts your prices for you.
That's your responsibility.
The Numbers Are Hard to Ignore
According to the U.S. Bureau of Labor Statistics, consumer prices increased 3.4% over the 12 months ending August 2026.
Energy prices increased 16.3% over that same period. Food prices increased 2.7%.
And when you look further back, the difference becomes much more significant.
Between August 2015 and August 2026, the Consumer Price Index increased approximately 40.6%.
Something that cost $100 in 2015 would cost about $141 today, based on the change in the overall index.
That doesn't mean every expense has increased by exactly that amount. Some have risen much faster, while others haven't increased nearly as much.
But it gives you an idea of just how different the cost of living has become.
And here's something else worth understanding.
When inflation comes down from 8% to 3%, that doesn't mean prices have come back down. It means they're generally increasing at a slower rate.
Those previous increases are still there.
Meanwhile, the Bureau of Economic Analysis reported that Americans saved just 4.1% of their disposable personal income in August 2026.
That's the environment your customers are operating in.
They're watching their spending more carefully, while you're also facing increasing expenses.
And that's why getting your pricing right matters so much.
What Happens When Your Costs Increase but Your Prices Don't?
Let's say you own a window tint, detailing, or other service business.
You charge $500 for a particular job.
Your direct labor and material costs are $300, leaving $200 to cover your remaining overhead and profit.
Now imagine those direct costs increase 25% over several years.
You're paying $375 to complete the same job.
But because you're uncomfortable raising prices, you're still charging $500.
Your contribution toward overhead and profit just dropped from $200 to $125.
That's a 37.5% reduction in what you have left over from each job, even though your costs only increased 25%.
To get back to your original $200 per job, you'd need to charge $575.
And here's where it gets worse.
If you're trying to generate the same $20,000 contribution you previously earned from 100 jobs, you'll now need 160 jobs at the old price.
That's 60% more work to get back to where you were.
These are simplified numbers, before fixed overhead, but the lesson is important.
You can be getting busier, selling more jobs, and working longer hours while actually making less money.
This is why I think it's important to understand how profitable your business really is, beyond just looking at revenue.
A full schedule doesn't automatically mean you're doing well.
The Advantage New Businesses Have That Nobody Talks About
When people talk about starting a business, they usually focus on all the advantages established companies have.
And they're right about many of them.
An established business has a reputation, existing customers, reviews, experience, processes, and relationships that take years to develop.
But there's an advantage a new business has that I rarely hear people discuss.
They get to establish their prices based on what it costs to operate a business today.
Think about that.
Someone starting a window tint shop in 2026 is looking at today's rent, today's wages, today's insurance premiums, and today's material costs.
They need to figure out what to charge based on those expenses.
They don't have a customer from 2015 reminding them that the same installation used to cost $299.
They don't have ten years of old pricing built into their expectations.
They haven't spent years conditioning customers to expect a certain number.
They get to start fresh.
Of course, plenty of new businesses make the mistake of underpricing themselves too. And they still have the difficult job of earning customers' trust.
But they have the opportunity to build their pricing correctly from the beginning.
Meanwhile, an established business might have been operating for 15 years, doing excellent work, with a great reputation and a steady stream of customers.
Yet its owner is hesitant to raise prices because they're worried about what those customers will think.
That owner may have every operational advantage over the new competitor, but a significant disadvantage in the way they've priced their services.
And it was entirely avoidable.
Your Customers Don't Need to Understand Your Expenses
Here's where I think business owners sometimes get this wrong.
You shouldn't expect customers to pay more simply because your insurance went up, or because you're paying higher wages.
Those things explain why you need to charge more.
They don't necessarily explain why the customer should choose you.
That's a different conversation.
Customers are buying a result, and the experience of getting that result.
Think about a window tint shop quoting $500 for an installation.
If the entire sales process is a text message with a price, customers are naturally going to compare that number against the other quotes they receive.
But what if the business makes it easier for the customer to understand the available films, the performance differences, what the warranty covers, how the installation is handled, and what they should expect afterward?
What if the company is responsive, professional, and does exactly what it promises?
Those things have value.
I don't believe you should need some elaborate sales pitch to justify your prices. In fact, I think the better approach is usually to make the buying process as clear and easy as possible.
But you do need to give people a reason to choose you beyond price.
And if you can't explain what makes your service worth what you're charging, that's something worth fixing.
Raising Prices Doesn't Necessarily Mean Losing More Money
One of the biggest fears owners have is that increasing their prices will cause them to lose customers.
And yes, that's possible.
Some customers are going to choose a cheaper competitor.
But losing a few jobs doesn't automatically mean you're worse off.
What matters is how much you're earning from the work you actually sell.
Imagine you're currently charging $500 for a service that has $350 in variable costs.
You're left with $150 per job before fixed overhead.
If you increase the price 10%, to $550, you're now left with $200 per job, assuming those costs don't change.
That's a 33% increase in the contribution from each completed job.
At the original price, 100 jobs generate $15,000.
At the new price, 75 jobs generate that same $15,000.
In this simplified example, you could complete 25% fewer jobs and generate the same contribution toward overhead and profit, provided the costs really decrease with job volume.
That doesn't mean raising prices 10% is always the right decision. You still need to consider demand, employee utilization, overhead, and your competition.
But it demonstrates why focusing only on how many jobs you sell can lead you in the wrong direction.
Sometimes the better business isn't the one selling the most jobs.
It's the one earning enough from the jobs it takes on.
But What About Customers Who Are Already Struggling?
This is where Graham's video is particularly relevant.
People are feeling financial pressure. Some customers genuinely can't afford what they could a few years ago.
That's real, and you shouldn't ignore it.
But you can't solve your customers' financial problems by slowly making your own business unprofitable.
There are better options.
Maybe you offer a more affordable product alongside your premium products.
Maybe you help a residential customer prioritize the windows that will make the biggest difference instead of quoting the entire house.
Maybe you improve your operations so you can deliver the same service more efficiently.
Or maybe you accept that not every customer is the right customer for your business.
The point isn't that every business needs to become more expensive.
The point is that you need to understand what it costs to deliver your service and make intentional decisions about what you're willing to charge.
If you're going to discount a job, understand what you're giving up.
If you're going to hold your prices steady, understand what that's costing you.
Don't just absorb the difference because you're afraid of having a conversation.
What I Would Do If I Owned a Service Business Today
I wouldn't recommend automatically increasing every price by 10% tomorrow.
I'd start by understanding the business.
Look at your last 20 or 30 jobs. What did you actually charge, what did the labor and materials cost, and what was left? Look at the different services individually because some may be considerably more profitable than others.
Compare your costs to a year or two ago. Go beyond materials. Include wages, payroll taxes, insurance, rent, vehicles, equipment, advertising, software, and everything else you need to operate. If you're personally doing work that you'll eventually need to hire someone to do, account for that too.
Figure out what each service needs to sell for. Not what you'd like to charge or what you think a customer wants to pay. Start with the economics, then consider demand and competition. Determine what a sustainable price actually looks like.
Review how you communicate your value. If you're going to charge more, make sure your quoting process, customer experience, and service quality support that price. Don't assume the customer automatically understands everything that goes into your work.
Make a measured change and track the results. Test new pricing on future quotes while honoring existing commitments. Look at your close rate, contribution per job, total contribution, and overall profitability. Then adjust based on what the numbers tell you.
And I'd repeat that review regularly.
You don't necessarily need to raise prices every quarter.
But you should know whether you need to.
The Longer You Wait, the Harder It Gets
One of the problems with avoiding price increases is that eventually the adjustment becomes much larger.
A business that regularly reviews its pricing might need relatively small changes along the way.
A business that ignores pricing for five or ten years could find itself needing a substantial increase just to get back to where it should have been.
That's a much harder conversation to have with customers.
It's also why I think confidence in pricing is something business owners need to develop early.
If you've built a good reputation, if your team does excellent work, and if you're providing a great customer experience, you should be comfortable charging a price that allows you to keep doing those things.
And if your market won't support the price you need, that's important information too. You may need to rethink your services, costs, positioning, or business model.
But continuing to operate at prices that no longer make financial sense isn't a long-term solution.
The numbers Graham discusses are a reminder of just how much the cost of everyday life has changed.
For business owners, there's a bigger lesson.
If you're still making pricing decisions based on what customers paid five, ten, or fifteen years ago, you're running today's business with yesterday's numbers.
Your rent isn't based on 2015 prices.
Your employees aren't being paid 2015 wages.
Your insurance company isn't charging you 2015 premiums.
So why are you still using 2015 prices?
That's a question every established business owner should be willing to answer.