Price Increase Impact Calculator

See what a 5% increase actually does — and how many customers you can afford to lose.

Your numbers

Current annual revenue$Current gross margin (%)%Price increase (%)%Volume you expect to lose (%)%Annual overhead (fixed costs)$

Your result

New revenue: $1,524,750
New gross profit: $669,750
Gross profit change: $69,750
New gross margin: 43.9%
Net profit before increase: $120,000
Net profit after increase: $189,750
Customer loss you can absorbLose more volume than this and the increase leaves you worse off on gross profit.: 14.9%

Gross profit improves by 11.6%.

At a 40% margin, a 7% increase lets you lose up to 14.9% of your volume and still break even on gross profit. In practice most established businesses lose far less than they fear — and the customers who leave are usually the least profitable.

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What this number actually tells you

Owners hold prices for years because they're afraid of losing customers. The arithmetic almost always says the fear is out of proportion. A price increase drops straight through to gross profit, while a customer you lose only costs you their margin — not their revenue.

At a 40% gross margin, a 7% price increase lets you lose roughly 15% of your volume and still be even on gross profit. And you'd be doing 15% less work to earn it, with less labor, less wear and less risk.

This tool shows the whole picture: new revenue, new gross profit, new net profit, and the exact volume loss that would make the increase a wash.

How the math works

01New revenue = current revenue × (1 − volume loss) × (1 + increase).
02New COGS = current revenue × (1 − gross margin) × (1 − volume loss) — unit costs don't change when price does.
03New gross profit = new revenue − new COGS.
04Break-even volume loss % = increase ÷ (gross margin + increase). At a 40% margin with a 10% increase: 0.10 ÷ 0.50 = 20%.
05Net profit = gross profit − overhead, which is unchanged by the increase.

What to do with the answer

Give notice in writing, apply it consistently, and don't make exceptions that make you look arbitrary.
Raise on your worst-margin work first. That's where you're subsidizing customers, and where losing a few is a gift.
Pair the increase with something visible — response time, warranty, cleaner communication — so it reads as professional rather than opportunistic.
Expect complaints from a small number and departures from fewer. Track actual losses against the break-even number above instead of guessing.

Want someone to read these numbers with you?

The Growth Assessment is a 30-minute conversation about what your numbers are telling you and what to fix first. No pitch deck, no PDF.

Schedule Your Growth Assessment Or call (737) 888-0415

Questions owners ask about this

How much can I raise prices without losing customers?

Most established service businesses can move 5–10% with minimal loss, especially with notice and a consistent explanation. The tool above tells you what you can actually afford to lose — that number is usually two to three times bigger than owners expect.

Why does a price increase help more than a sales increase?

Because price increases carry almost no incremental cost. A 7% price increase adds 7% of revenue straight to gross profit. Adding 7% more work adds labor, materials, fuel, wear and risk to earn the same dollars.

Should I raise prices on existing customers or only new ones?

Both, eventually. New-customer-only pricing means your longest-tenured accounts become your least profitable ones. Give existing customers notice and a date, and reprice your worst-margin accounts first.

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