Half of Owners Will Raise Prices. Most Will Guess.

Picture a landscaping company owner at his kitchen table on a Sunday night in November. Fuel went up. Mulch went up. His insurance renewal came in higher. He has a price sheet in one hand and a pen in the other, and he writes "+8%" across the top of it.

Why 8? Because 10 felt like too much and 5 felt like it wouldn't cover anything.

That is how most price increases get decided. And next year a lot of owners will be sitting at that same table.

The number everyone is about to pick

Gusto's 2026 State of Small Business report, covered this week by CPA Practice Advisor, surveyed 1,731 owners of businesses with 24 or fewer employees. 52% raised prices in the past 12 months, most often by up to 10%. Another 50% plan to raise them again next year.

The reason is no mystery. 59% said changing input prices hurt their business over the past year. Only 3% said the effect was positive.

The same survey found 67% of small businesses now use AI tools in some form. So most owners have the tool on their phone. Far fewer seem to be pointing it at the decision that touches every single dollar coming in.

A flat increase treats every job, product and customer the same. Your business doesn't work that way, so your prices shouldn't either.

Your margins are hiding in your own records

Most owners know their overall margin, roughly. Very few know it job by job or item by item, because working that out by hand takes a weekend nobody has.

That is exactly the kind of work AI is good at. Export the last 12 months of invoices or sales from your accounting or point-of-sale system. Pull your main supplier bills for the same stretch. Hand both to an AI assistant and ask it plain questions:

• Which services or products had the biggest jump in what they cost me to deliver?
• Which ones are now close to break-even, or below it?
• Which customers buy mostly the low-margin stuff?
• Where did I quote the same work at different prices to different people?

For the landscaper, the answer might be that mowing contracts are fine, but mulch installs lost most of their margin when material costs climbed. Or that three commercial accounts locked in two years ago are now being serviced at a loss. That changes the decision. Maybe mowing goes up 3%, mulch installs go up 15%, and those three contracts get a conversation instead of a letter.

Same total revenue lift. Far less risk of losing the customers who were never the problem.

An across-the-board increase is a guess. A line-by-line increase is a plan.

Let AI do the math, keep the judgment

There's a limit here worth being clear about. AI can tell you what your numbers say. It can't tell you that the restaurant down the street just raised its catering prices, that your oldest client is struggling this year, or that your crew lead is the reason three customers stay with you.

So use it for the parts that eat time:

• Run the scenarios. "If I raise X by 12% and lose 10% of those customers, where do I land?" Ask it to show the math so you can check it.
• Check your own history. Did volume drop the last time you raised prices on a given item? Your sales data already knows.
• Spot the stragglers. Customers still on a rate from three years ago are easy to miss and easy to find.

Then make the call yourself. The tool does the spreadsheet. You still know your customers better than any spreadsheet does.

One caution: double-check anything that drives a real decision. AI can misread a messy export or merge two products with similar names. Spot-check a few lines against the originals before you trust the totals.

The notice matters as much as the number

How you tell people often matters more than the increase itself. A two-line email that says "prices are going up 8% on January 1" invites people to shop around. A short, honest note that names what changed and what stays the same usually lands fine.

AI is useful here too. Give it the facts (what is rising, by how much, when, and why) and ask for three versions: one for longtime customers, one for newer ones, and one for the accounts getting a personal call first. Then edit them so they sound like you. Cut anything that reads like a form letter.

A few things that help:

• Give real notice. 30 to 60 days beats a surprise on the next invoice.
• Name the cause plainly. Customers understand fuel, materials and insurance. They don't love vague "rising costs."
• Say what they still get. If service, quality or response time stays the same, tell them.
• Call your biggest accounts before the email goes out.

Start with one hour this month

You don't need a pricing consultant or a new software subscription to do this well. You need one hour and the data you already have.

Pull the last year of sales and supplier costs. Ask an AI assistant where your margins moved. Look hardest at the three or four items or customers where the answer surprises you. Price those on purpose, and leave the rest alone or move them gently.

Half of small businesses are going to raise prices next year. The ones who look at the numbers first will keep more of the increase, and more of their customers.

If you want help setting this up for your business, from pulling the right exports to building a simple pricing review you can rerun every quarter, that's the kind of work we do at Nexera Intelligence. Happy to talk it through.