What happens if I increase my prices?

Thinking about increasing your prices, but worried customers might leave?

Losing some customers doesn’t necessarily mean earning less profit. This calculator helps you explore how a price increase could affect your revenue and gross profit, so you can look at the numbers behind the decision.

How to use it

Choose monthly or annual figures, then enter your current revenue, customer numbers and direct costs for that same period.

Direct costs are the costs of delivering your products or services, such as materials or subcontractors. Leave out overheads such as office rent and accounting fees.

Add your proposed percentage price increase and the number of customers you think might leave. Try different scenarios to see how the results change.

If GST registered, enter revenue excluding GST and costs excluding recoverable GST. Otherwise, use the full amounts.

Understanding your result

The calculator compares your current and proposed revenue, direct costs, gross profit and gross profit margin.

It also estimates how many customers you could lose while maintaining your current revenue or gross profit. These limits assume customers have the same average spending and cost to serve.

Gross profit is revenue minus direct costs. It still needs to cover overheads and other obligations before you know what is available to pay yourself.

Keep the assumptions in mind

The calculator assumes retained customers buy the same amount at the higher price, and direct costs fall proportionally when customers leave.

If you lose a particularly large client, retain costs you cannot reduce, or customers start buying less, your actual result could be different

What happens if I increase my prices?

Explore how a price increase could change your revenue and gross profit—even if some customers leave.

All money amounts are NZD. Use figures from the same period. Boxes start at 0 and cleared boxes count as 0.

Changing this label does not convert your inputs. Enter figures for the selected period.

Use revenue for the period selected above. Exclude GST if registered.

Customers who generated this revenue during the same period. Each customer is assumed to spend the same average amount.

Costs of delivering these sales, such as materials and subcontractors. Exclude overheads. The model assumes direct costs fall in proportion to customers lost; costs per retained customer stay unchanged.

Applied to all retained customers, with no change in how much each buys.

Enter a number of customers, not a percentage. Try a few scenarios to see how the outcome changes.

What this estimate assumes

  • Equal average customers: Retained and lost customers have the same average spending and direct costs. Losing a large client can have a very different effect. For subscriptions or repeat orders, use a consistent customer count and period.
  • Costs follow volume: All entered direct costs fall proportionally when customers leave. Direct cost per retained customer stays constant. If you cannot reduce these costs, the proposed profit may be overstated.
  • Same purchasing behaviour: Retained customers buy the same amount at the higher price. Discounts, product mix, capacity limits and supplier price changes are not modelled.
  • Gross profit is not take-home pay: Gross profit is revenue less direct costs. Overheads, income tax, loan repayments and cash timing are not included. This is not a cash flow forecast.
  • GST: If registered, enter revenue excluding GST and direct costs excluding recoverable GST. Otherwise use full amounts. No GST or tax liability is calculated.

General planning guidance only, not personalised accounting, tax or financial advice. Check your assumptions and pricing with your accountant.

Want to explore a price change for your business?

We can help you look at your pricing, costs, customer mix and cash flow together - so you can understand the potential impact before making a change.

Disclaimer: This calculator provides general planning guidance, not personalised accounting, tax or financial advice. It does not predict customer behaviour or account for overhead changes, tax or payment timing. Review your assumptions with your accountant before making pricing decisions.