Price increase % on P&L

[Kimberly Berg]

In January 2024, I raised my SS wash price from $3 for 5 minutes to $4 for 5 minutes. 33% increase. I'm in the process of selling my car wash and the potential buyers and my real estate agent are telling me that this 33% price increase should be showing at least 33% increase on the Total Income on my P&L (compared to last year). And, it's not. So, far I'm showing a 17% increase over last year ($50K). But they're telling me that my business went down 16% (33% - 17%). I disagree! My car wash is beautiful, modern and busier than ever. I'm not an accountant and waiting to hear back from my CPA. I know the 33% price increase is going to increase the Total Income on my P&L, but I don't think it's going to directly correlate to a 33% increase in Total Income. Your thoughts??

 

[MudMoney]

I'm blunt with realtors and future buyers of this haggling back and forth. This is my price and it's fair ,there is no reduction in price. Realtors only have self interest and moving on to the next victim.

 

[Dan kamsickas]

In January 2024, I raised my SS wash price from $3 for 5 minutes to $4 for 5 minutes. 33% increase. I'm in the process of selling my car wash and the potential buyers and my real estate agent are telling me that this 33% price increase should be showing at least 33% increase on the Total Income on my P&L (compared to last year). And, it's not. So, far I'm showing a 17% increase over last year ($50K). But they're telling me that my business went down 16% (33% - 17%). I disagree! My car wash is beautiful, modern and busier than ever. I'm not an accountant and waiting to hear back from my CPA. I know the 33% price increase is going to increase the Total Income on my P&L, but I don't think it's going to directly correlate to a 33% increase in Total Income. Your thoughts??

It's not. There can be a multitude of reasons for not seeing the full 33% increase in revenue. Regardless of some of the spin you see the economy is not strong. It can be easily argued that cost of living has increased by 20-30% in the last 4 years. That alone will lead to people washing their cars less frequently. It's a discretionary purchase. Weather plays a factor. Some people, I'm sure, saw the price increase and either went somewhere else or are washing less frequently. Another way to spin it is you increased revenue by 17% and reduced wear and tear on the equipment by 16%.

AND

If that is your agent, fire them. They are not looking out for your best interest.

 

[Axxlrod]

A 33% price increase will not translate into a 33% increase in top-line revenue. If your "realtor" is saying this to you, you've hired the wrong person. You need a broker representing you that understands small businesses.

To illustrate the point further, if you theoretically raised your prices 100% (or even 500%), you would not receive a 100% (or 500%) increase in total revenue, right? A certain % of your customers would not come back or patronize your business less frequently, resulting in a less than 100% increase in revenue.

A 17% increase in revenue from a 33% price increase sounds about right.

I just sold one of my washes last month so I just went through this.