Is Your Small Business Pricing Strategy Ready for Inflation?

In Q1 2025, 58% of small business owners named inflation as their top concern, according to a survey by MetLife and the U.S. Chamber of Commerce. Add to that, 62% report inflation causes them the most stress, per a NextInsurance snapshot. It’s easy to focus on sales, but if your costs are silently creeping up, your profit margins could be shrinking without you even realizing it.

What You Need to Know About Pricing in an Inflationary Market

Inflation means costs are rising for things like materials, shipping, wages, and utilities. Think about the flour for your bakery, the delivery fees for your online store, or the hourly wages for your part-time staff. Many small business owners face 20% or more increases in their expenses, with 71% actually reporting such a jump. Ignoring these creeping costs can put the long-term health of your business at risk.

To keep the business healthy, you don’t just need to raise prices—you need a small business pricing strategy that matches your increased costs while still honoring your value to customers. That balance keeps your business afloat without alienating those you serve.

Questions SMBs Should Ask About Pricing Strategy 

To see if your pricing strategy is still working—or if it needs a rethink—start by asking these critical questions:

• Have my costs risen in the last 6–12 months? Which expenses are up—and how’s that impacting margins?
• How will I explain a price increase? Have I planned a respectful, value-based message that builds trust?
• Can I reduce costs without hurting quality? Can I optimize suppliers, streamline operations, or renegotiate contracts?
• Are my prices high enough to grow? Do my prices cover costs and allow for healthy growth?
• What sets me apart beyond price? What makes my offering essential? How can I highlight this

What You Can Do Next to Stay Ahead of Inflation 

Once you’ve asked the right questions, it's time for action:

• Update your cost breakdown: Track what’s gone up most—supplies, rent, labor—and figure out your new break-even point.
• Run a pricing check-up: Compare your prices with costs and competitors to spot gaps.
• Write your price increase message carefully: Be clear, empathetic, and explain the value behind the change.
• Use support tools to model your next move: Navigating inflation and adjusting your pricing can bring legal questions. Rocket Copilot can help you review contracts and terms, while our Ask a Legal Pro feature connects you with legal experts to ensure your pricing strategy is legally sound.

Your pricing doesn’t have to be a guessing game. Use clear questions, smart tracking, and the right tools—and protect your profits while keeping your customers on board.