Hi ,
Dana roasts coffee outside Milwaukee. Fourteen employees, a cafe, a small wholesale list, a little under two million a year. Her beans cost 18% more than they did last year. Her rent went up in March. Neither one came down.
She ate the difference for eight months. The $5.50 latte stayed $5.50, because the one time she floated a quarter more a cup, her shift lead said people would just go to the drive-thru down the road. So she held the line and watched her margin on drinks slide from about 15% toward 9%.
That's not caution. That's a discount she handed herself every month, and nobody made her do it.
Here's the number that should have changed her mind sooner. At a 15% margin, a 5% price increase means you could lose one in four of those customers and still make the same profit you were making before. Lose fewer than that and you come out ahead. Dana wasn't going to lose a quarter of her regulars over an extra quarter on a latte. Almost nobody does, when the increase matches what their own costs did.