In Part 1 I told you about the fencing business that was drowning in revenue and drowning in debt. In Part 2, I showed you full absorption costing — the spreadsheet that reveals which jobs actually make money and which ones are slowly killing your business. Now comes the part that actually puts money in your pocket.
This section is about price. Not just costs. Not just understanding what you need to charge to break even. I'm talking about charging the maximum that the market will bear — without tipping over into the territory where your phone stops ringing.
The Advice That Changed Everything
Someone told me something simple: "Increase your prices a little — a few percent at a time — until you start seeing a drop-off in sales or not having enough work in the month."
That's it. That's the whole strategy. No algorithm. No fancy pricing software. No MBA textbook nonsense about dynamic pricing models. Just small, consistent increases and watching what happens.
Price elasticity is just a posh term for this: how much can you charge before people stop buying? Every market has a ceiling. Every product, every service, every type of work has a sweet spot where price and demand balance perfectly. Your job is to find it by getting as close to it as possible without going over.
The fencing business didn't fail because I was bad at fencing. It failed because I was charging £8,000 to install fencing that cost £12,000 to deliver. I was working myself to death and going broke in the process. What I needed wasn't more customers. I needed to stop being afraid of my own price list.
How I Actually Did It
I started tracking conversions: quotes sent versus quotes accepted.
Week 1: I added 5% to every quote. I held my breath and hit send. The acceptance rate didn't change. Nobody mentioned price. Nobody asked for a discount. Nothing.
Week 3: I added another 3% on top of that. Still converting at the same rate. Started to feel genuinely uncomfortable — surely someone would say no? But they didn't.
Week 5: Another 3% increase. This was the first week someone asked for a discount. They said their budget was tighter than expected. I explained the value. Talked about the materials, the timeline, the quality guarantee. They accepted the price.
Week 7: Pushed another 2%. Now I started noticing one or two more people going quiet after receiving quotes. The close rate didn't drop dramatically — it stayed stable — but I could feel the friction increasing. Phone calls lasted longer. More questions. More hesitation.
That was my ceiling. I pulled back to the previous level — the Week 5 price point — and that became my standard pricing.
The sweet spot: the highest price where your close rate stays stable and you have 3 weeks of work booked ahead.
The math was staggering. I'd increased prices by roughly 13% over seven weeks. But my costs hadn't changed. My overhead was the same. My labour hours were the same. Suddenly, every job that used to give me 10% margin now gave me 20%. The business went from hanging on by its fingernails to actually generating profit.
Why Your Customers Don't Care About Price as Much as You Think
Here's what I understood once I started watching what happened: price is just one signal among many. And it's not even the strongest one.
The fencing business had something that most fencing companies don't. Professionally dressed staff. Clean vans washed every morning. Tools clean and well-cared-for. A respectful attitude. A proper invoice. A timeline. A guarantee.
Competitors would quote lower. Customers would still choose us. Why? Because price is only ONE factor. Trust, professionalism, confidence — these all affect willingness to pay.
The carpenter who shows up in a clean van with a proper quote document, printed on thick card with your logo on it, will beat the cheaper competitor who shows up in a dirty van and writes the price on the back of a cigarette packet. Every single time.
People don't buy the cheapest option. They buy the option that makes them feel safest.
And safety is incredibly valuable. It's worth 10%, 15%, sometimes 20% more than the price-shopper competitor. You've just never charged for it because you didn't realise you had it.
The Deposit Strategy
Raising prices is one half of the equation. The other half is protecting your cash flow.
I started taking large deposits upfront. Materials costs and a portion of labour paid for before the first tool came out of the van. Only a small portion of profit remaining on completion.
This eliminated the anxiety of cash flow. I wasn't financing the customer's project with my own money. I wasn't waiting three weeks for payment while I'd already spent four grand on materials. The money came in first. Then the work happened.
And every single job ran through the absorption costing spreadsheet. If the margin wasn't high enough? I didn't take it. This is the key mindset shift that nobody talks about: saying NO to low-margin work is not losing business. It's making room for profitable business.
You have a fixed capacity. You can do X number of jobs per month. If half of them are low-margin and half are high-margin, you're making half the money you could be making. But if you say no to the low-margin ones, you can fill that capacity with high-margin work instead. Same amount of work. Double the profit.
How to Test This in Your Business This Week
You don't need permission from anyone to start this experiment. You don't need fancy software. You don't need to wait for the perfect moment.
1. Pull up your last 10 quotes. What was your close rate? If 6 out of 10 were accepted, you're converting at 60%.
2. For your next 5 quotes, add 5%. Don't mention it. Don't apologise for it. Just quote 5% higher than you normally would. Watch what happens to your close rate.
3. Track the result. Same close rate as before? Good. Add another 3% on the next batch.
4. When you get pushback from more than 1 in 5 customers, you've found your ceiling. Step back one notch. That's your price.
5. Combine it with absorption costing: check that your new price delivers the margin you need. If it doesn't, go back to step 2 and raise it again.
If you raise prices by 10% and lose 10% of customers, you're still earning the same revenue with less work. That's a win.
But you won't lose 10% of customers. You'll find that your close rate stays almost the same until you hit the ceiling. And the ceiling is almost always higher than you think.
The Real Lesson
I went from -£80k to +£80k not by finding more customers. I found better prices for the customers I already had, and I stopped taking jobs that lost money.
The fencing business ended up with 67% net margin because we did three things: we charged prices that reflected our value, we understood our true costs, and we said no to anything that didn't make sense.
You don't need a bigger marketing budget. You don't need more leads. You don't need more customers. You need to know what to charge the leads you've got. And you need the nerve to charge it.
In Part 4, I'll show you how I cracked advertising — including the magazine placement trick that most people get completely wrong.