Pricing issues often vex small businesses, especially in today's climate, with competition - domestic, foreign, and Internet - rising along with costs. But veteran business owners and pricing experts say that if more small companies freshly examined their competitive positions and service offerings, they would find that they could raise prices, keep key customers, and boost their bottom line. "Raising prices is risky," says Ralph Zuponcic, a Hudson, Ohio, consultant (pricepointpartners.com), "but so is not raising prices."

First, experts say, remember the rich payoff you can reap from even a small price hike. If your firm enjoys, say, a 10% profit margin, a mere one percentage point bump in the price of your product will deliver a 10% hike in profits.

Many business owners assume that any price increase will drive customers away. But consultants who work with small companies say they often under-estimate their pricing power. Those owners know their costs are rising but sometimes forget that fuel prices are soaring worldwide and that workers are demanding higher wages even in China, India, and other developing countries. Many small U.S. manufacturers, in particular, become so focused on price competition with larger rivals or foreign ones that they don't appreciate the value of the added quality they offer, their fast and reliable delivery, or other superior services they provide - or could provide - to justify higher bills.

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