We want to raise our prices to boost our margins on our exit runway, but we are terrified of losing legacy customers right before due diligence. How do we balance this risk?

Question

Tyler Smith · Accepted Answer

When preparing for an exit, founders often look for quick levers to boost EBITDA. Raising prices is the fastest way to increase profitability, but doing so right before going to market carries significant risks. If your price hike triggers a wave of client churn during due diligence, a buyer will see your revenue as unstable and discount your valuation. To make this decision, you must think in bets, evaluating the potential returns against the probability of negative outcomes. Use these steps to de-risk a price adjustment on your exit runway:

- Segment your customer base and test the price increase on a small, non-critical group of clients first to gauge their reaction.

- Ensure your service delivery is flawless by tracking your client satisfaction metrics weekly on your EOS Scorecard before rolling out adjustments.

- Quantify the net impact by calculating how much customer churn you can tolerate before the price increase becomes unprofitable.

If your customer satisfaction is high and your market data shows you are underpriced, a structured price increase can significantly enhance your valuation. However, if your service delivery is inconsistent or your customer relationships are fragile, the bet is too risky. Proceed only when your operational data supports the move, and document your pricing logic clearly for the buyer's due diligence team.