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Calculator · Free

Price Increase Impact Calculator

Model what happens to revenue and profit when you raise prices — and how many customers you can afford to lose.

Current business
$
52%

Direct job cost as share of revenue.

$/mo
Proposed increase
10%
5%

Percentage of jobs you expect to lose.

Price increase adds profit

$879more profit per month

Revenue up $1,832/mo. New price: $2,035 on 20.9 jobs.
Current monthly profit
$11,336
New monthly profit
$12,215
Break-even volume lossYou can lose this much volume and still break even
9.1%
Your expected volume lossBelow break-even — increase is profitable
5%
Before vs. after
MeasureCurrentAfter increaseChange
Price per job$1,850$2,035+10%
Jobs per month2220.9−5%
Monthly revenue$40,700$42,532$1,832
Monthly profit$11,336$12,215$879
Volume loss scenarios at new price
Volume lossJobs/moRevenueProfit
0%22.0$44,770$13,290
5%20.9$42,532$12,215
10%19.8$40,293$11,141
15%18.7$38,055$10,066
20%17.6$35,816$8,992
25%16.5$33,578$7,917

You can lose up to 9.1% of volume and still profit

A 10% increase at 48% contribution margin breaks even at 9.1% volume loss. You expect 5% loss — adding $879/month in profit.Most residential contractors lose 3 to 8% of customers on a 10% increase.

What this assumes

  • Variable cost percentage stays constant after the price increase.
  • Volume loss is the percentage of jobs you expect to lose, not revenue.
  • Fixed costs do not change with the price increase.

Important

Most contractors wait too long to raise prices and raise too little. A 10% increase that loses 5% of volume is almost always profitable at typical contribution margins.

Understanding the result

You can lose customers and still make more

A 10% price increase with a 45% contribution margin is profitable unless you lose more than 10% of volume. Losing 5% of jobs while charging 10% more adds roughly 4.5% to revenue and more to profit because costs drop with volume.

The break-even loss rate

Break-even volume loss = price increase % ÷ (price increase % + contribution margin %). A 10% increase at 50% margin breaks even at 16.7% volume loss. Below that, profit rises. Most residential contractors lose fewer than 8% of customers on a 10% increase.

Raise prices on new customers first

Increase rates on new quotes before sending increases to existing customers. This tests market response without risking your base. Grandfather existing maintenance customers for 6 months if needed.

Common questions

How much can a contractor raise prices without losing customers?
Most residential contractors raise 8 to 15% every 18 to 24 months with 3 to 8% volume loss. At 50% contribution margin, a 10% price increase is profitable unless you lose more than 16.7% of jobs.
Will I lose customers if I raise my prices?
Some, yes — price-sensitive customers leave. But a 10% increase that loses 5% of volume increases profit at typical margins. The customers who leave are often the ones who complain, pay late, and generate callbacks.
How often should contractors raise prices?
Annually at minimum, or whenever material costs rise more than 5%. Shops that have not raised in 3 years are typically 20 to 30% below market. Catch up in one increase or phase over two quarters.
How do I tell customers about a price increase?
Notify existing customers 30 days ahead with a brief letter: cite material and insurance cost increases, state the new rate, and reaffirm warranty and service quality. Most say nothing and simply quote new rates on the next job.
What is the break-even volume loss for a price increase?
Break-even loss = increase% ÷ (increase% + contribution margin%). A 15% increase at 40% margin breaks even at 27.3% volume loss. If you would lose fewer than 27% of jobs, the increase adds profit.

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