 Hey, it's Brett and Tom with Lawrence Systems, and this is business talk and In order to continue to deliver positive results, we will be increasing your rates. Isn't that a great opener? I was reading a letter that we're sending to clients about The fact is is that rates are increased time over time inflation happens, right? There are a lot of people that in 2020 Didn't increase their rates from 2020 to 2021 because of what was going on There was a lot of cash, but there were a lot of companies that did and I don't recall Employees making less money in 2020 and 2021. I think they got raises still I think that certain things happen costs for products increased, right Tom? Yep, definitely So why wouldn't you raise your rates and why wouldn't somebody? Not expect like a client to for you to raise your rates It's something that happens you're paying more for gas and you were you know a year ago You're paying more for groceries and you ever have so food's costing more Everything's costing more and the big topic is what should I raise my rates to or should I raise my rates? The answer is yes, and yes You should be charging what you need to charge to pay those employees to buy those products because Let's face it. The RMM isn't getting any cheaper and I viruses aren't getting any cheaper. What are your thoughts Tom? You know one of the most just persistent questions I've seen a lately is about the rate increases how much notice you give your clients and this is actually very very key if you Don't give them anything more than a 30 days heads up then you're doing yourself a disfavor You're going to cause some drama with your client having a clear path of communication people understand It anyone is in business understands that hey, I'm paying more for something that I wasn't before You know, we have a lot of people in the transportation market They will tell you that the fuel costs and things like that are just constantly things are dealing with even their insurance rates We all know insurance rates went up. It's just kind of expected it. You're Just Making sure that you communicate it is one of those so key points It's one of the reasons we open with a letter like that because you know We have to have some formal letter that we send to these people But telling them plenty of time ahead is what allows them to fix it and put it into the budget You even look at Microsoft for better or worse They've decided to increase the rates of what they're charging for their office 365 descriptions But how long in the head do we know quite a bit? You know this rule from large companies even to smaller businesses is the same Make sure you have clear line of communication to let people know the rate increase is coming and there'll be a lot more Understanding to it. It's kind of an expected thing every year that this happens So it's not when I see people asking should I I'm like, well, why wouldn't you did right? I'm incredible windfall happened you created some incredible efficiency in your business that somehow cut all the cost by One half well great now you can actually think about delivering a service for less money or how you're gonna be more profitable But that just doesn't usually occur especially in the more niche space We're talking about here and the managed services space of how we manage IT We're dealing with ourselves insurance increases just like our clients are we're dealing with tooling increases some of the tooling Hey, the price goes up and not much but a little bit But that all adds up when you start managing many many end points So a small increase per endpoint or you know per license means kind of a ripple effect of art This has to be compensated for all the way across the board and as Brett mentioned Employees they don't see progress if there's wages stagnate they'll start looking around somewhere else So if you're not giving your employees wages, do you really want to risk losing the talent? That's one way to do it I've seen this happen There's so much turmoil right here in 2021 in the IT industry with turnover amongst employees is because they don't feel valued They don't feel they got a raise and it's just a calamity of things that if you don't manage it You'll end up on the losing side of it. It's actually a big problem right now You know, we've we've got friends in the industry that Have hopped around to different different places and and and have it they're making an Really good income now, but somebody else wants to offer them Half, you know double that or a lot more exponentially raising their their dollars They make so we have to stay in the game with our employees and pay them. Well, they have to be paid what for what they do and Hopefully your employees are learning as they go, right? So they're getting more and more skills and we talked about that this morning You know the people that work here at Lawrence technology service. They Their their skills are through the roof here We're always pushing them for more and then we have to in the same balance while I'm pushing it While I'm helping to pay for classes and anything that they need to give them the resources They need to grow. It's not like I'm just saying grow so so you can keep your job. It's grow Here's how we make more money. Here's how we can leverage that knowledge you have But all that comes at a price internally that is then reflected externally to your clients so we can deliver services better It's just the cycle of things. It's not really a matter at all. Oh, should you increase prices? It is a matter of how much and I don't I don't think that it should be unreasonable That is just not an easy formula. It should be not like double your prices But maybe at least at the very minimum you have to increase at the cost of inflation Also the cost of your two links. It's not directly just because food costs more. I mean, yes Our food bill here as we buy food for people at the office is definitely higher But that's not really just the reason I'm increasing it There's a lot of other factors you have to take in that are very industry specific here in IT So it's just the way things work right now I wish and despite the cloud promising to make things cheaper everyone it works and it goes Yeah, that didn't happen and It did change a lot of dynamics But it still now does part of the process of these yearly rate increases that we send out notices We send out to our clients right and there's a process that we follow in doing that like you said It's always about a process and and how you follow that process and there's there's a there's things We do you want to reach out to me and ask me we'll talk Love to love to talk to people and love to love to give our knowledge away in some respects But we also you know, we want to we want to be helpful out there, but Raising your prices is something you're gonna have to do. I'm not paying the same for gas that I did in 1986 or 87 when I started driving that'll tell you my age right there. I mean, I remember paying 89 cents a gallon Yeah Well, we won't reminisce too much about the good old days But we will leave you with something I will throw in the description down below a link to a general template for how we send out price increases Just kind of a generic letter. So for those you struggling for the wording. I want to give you some value You can use that that phrase we have the baby will be in there along with some general stuff Please customize it to The company that you are and put your information on I enjoyed writing that letter. What are you talking about? Okay, use Brett's words. If you like it's not copy written. I'm actually giving you permission All right, he gave permission you're done this video use it as evidence if it ever comes up All right in thanks