Reference

Plan a price increase

Exemptions, delay and concessions reduce the revenue a price increase adds in its first year. The worked example leaves A$27,000 before any volume or mix change.

Make a price increase decision sheet, or work through the calculation below. The tool shows the same example before you enter anything.

First-year revenue formula

Use annual revenue for the product group or customer segment covered by the plan. Count delay from the start of your twelve-month planning period.

Extra revenue = R × p × (1 − e) × ((12 − d) / 12) × (1 − c)

Symbol Meaning Example input
R Annual revenue before the increase A$1,000,000
p Planned increase, as a fraction of the original price 0.05 = 5%
e Share of revenue exempt from the increase 0.20 = 20%
d Months before the increase takes effect 3 months
c Share of the remaining uplift given back through concessions 0.10 = 10%

Enter percentages as fractions in this formula. The tool accepts percentage numbers, so enter 5 for 5% there.

Use positive annual revenue and a positive planned increase. Exemptions and concessions range from 0% to 100%, inclusive. Their formula fractions range from 0 to 1. Delay ranges from 0 to 12 months, inclusive.

Concessions remove a share of the uplift after exemptions and delay. A 10% concession here removes a tenth of that remaining increase. It does not discount the whole new selling price by 10%.

Worked example: A$27,000 in the first year

The decision sheet uses these invented figures. Annual revenue is A$1 million, with a proposed 5% increase.

A$1,000,000 × 0.05 × 0.80 × (9 / 12) × 0.90 = A$27,000

Step Calculation Amount
Proposed annual increase A$1,000,000 × 5% A$50,000
Less: exempt revenue A$50,000 × 20% A$10,000
Increase after exemptions A$50,000 − A$10,000 A$40,000
Less: three months before prices change A$40,000 × 3 / 12 A$10,000
Increase after delay A$40,000 − A$10,000 A$30,000
Less: concessions A$30,000 × 10% A$3,000
Extra revenue in the first twelve months A$30,000 − A$3,000 A$27,000

The result equals 2.7% of starting annual revenue. It retains 54% of the proposed A$50,000 increase.

Assumptions and limits

Revenue is spread evenly across twelve months. Underlying volume and mix stay constant. Exempt revenue receives no increase.

The increase starts once, after the stated delay. The concession percentage applies to the remaining uplift. Seasonal revenue or different effective dates need a more detailed calculation.

The result measures extra revenue. Costs and customer response need separate analysis. This illustration is not a forecast of revenue or profit.

Revenue and contribution answer different questions

The volume-loss breakeven explanation asks how much volume a price increase can lose while holding contribution constant. It assumes full, immediate exposure to one price increase.

Do not use the first-year 2.7% revenue result as the price change in that formula. Exemptions and timing need analysis by segment or period.

Choose your next step

Limits

The tools work separately. Your inputs are not transferred between them. Check agreements and notice requirements before using the rollout plan.

Review the pricing practices behind the decision

The Pricing Health Check reviews the practices behind your prices. The full check is optional.

Calculation and corrections

Published by onestepright. Worked calculation checked 31 October 2026 against the decision sheet's arithmetic. The inputs are invented for illustration.