UK Business Cost Management 2025: How to Apply Price Increases with Confidence
Rising Business Costs in 2025: The Pressure is Real
In today’s UK business landscape, financial pressures are mounting from all angles. Rising staff costs, increasing legislative burdens, utility bills, and transport costs are creating an environment where doing nothing simply isn’t an option.
As someone who spent over a decade negotiating cost prices with UK national retailers, I’ve sat across the table from some of the toughest buyers in the country. We battled over commodity price shifts, fuel surcharges, wage increases, packaging standards, and regulatory changes. One wrong move could result in a delisted product, a range reduction, or loss of share of supply.
So how do you apply price increases in your UK business without triggering client pushback or losing market share? Let’s explore that—along with other strategies to reduce cost pressure and boost revenue resilience.
How Rising Costs Impact UK Businesses in 2025
Consider this: if your costs rise by 10%, how much extra sales do you need to cover that? For a business with a 20% profit margin, you’d need to increase sales by 50% just to stand still.
That’s not realistic for most, which is why strategic price increases and efficiency gains are vital for UK SMEs.
Price Increase Strategies for UK Businesses: 5-Step Process
- Justify with Transparency
Be upfront about why prices are increasing: wages, utilities, fuel, compliance. Your honesty builds trust. - Reinforce Value
Shift focus to what your clients get. Better service, risk reduction, time savings, reliability. - Make It Relatable
Break it down: “It’s the equivalent of a coffee a week.” Compare to market rates or inflation benchmarks. - Offer Dialogue
Invite your clients to discuss it with you. Be approachable, not defensive. - Add Value or Loyalty Incentives
Introduce new features, priority support, or exclusive access to soften the increase.
This mirrors tactics from Chris Voss’ “Never Split the Difference”: use tactical empathy, label concerns (“It sounds like this price increase is frustrating for you”), and calibrated questions (“How can we make this work for both of us?”).
Combat Rising Business Costs in the UK: Additional Strategies
- Reduce Overheads: Review utilities, software, and supplier contracts.
- Realign Roles: Restructure responsibilities to boost efficiency without cutting headcount.
- Caution: Restructures can cause staff unrest and morale issues if mishandled—clarity and communication are key.
Sales Growth Strategies for UK SMEs
Instead of relying solely on cuts, explore UK sales growth strategies:
- Improve lead generation
- Increase conversion rates
- Raise average sales value
Want to upskill your team? Our 12-Week Sales Masterclass is designed to help UK businesses grow revenue through proven sales strategies.
Free Business Coaching UK: Let’s Talk
If you’re thinking about applying a price increase and want to strategise for success, I’m offering a free business coaching session in the UK to help you explore:
- The best way to communicate your increase
- How to protect your margins
- What sales and cost strategies suit your business best
Book your free session today and let’s make your price increase a growth opportunity—not a risk.
ps – Make sure that you are prepared!
Price increases are very rarely an easy conversation, so make sure that you have prepared. Work out what you want and what you need. This stops you from negotiating with yourself and coming out worse off. And, unless there are significant market changes, stops you going back to raise prices again in 6 months time when you realise you have still not recovered what you need.
The customer might not agree immediately (shock). Make sure you are prepared to handle any objections in an agreeable manner, if you need help with this, get in touch.
Position the communication. Unless they’ve just landed, your customers will know that there are cost pressures, they are feeling them too. If the conversation is not positioned well, be prepared for a difficult one. Remember, it’s cheaper to keep a customer that buy a new one.
Once you have prepared, follow the 5 step process above.
