A sufficient volume decline can offset the higher price. Compare contribution as well as revenue before deciding.
Try this with your own numbersFormula and worked example
New revenue = price × (1 + increase) × volume × (1 − volume loss)
| Input | Example |
|---|---|
| Current price | 100 |
| Price increase | 10 % |
| Current monthly sales | 200 |
| Expected sales volume loss | 5 % |
| Calculated result | 20,900 per month |
Baseline revenue: 20000
Choose reliable inputs
Include software licences, delivery time, revisions and ongoing support when costing a project. For this managed it service calculation, use project time logs, licence invoices and retainer scopes and a consistent definition of one client month.
- Licenses: include the portion belonging to this client month or reporting period, and record where the value came from.
- Support labour: include the portion belonging to this client month or reporting period, and record where the value came from.
- Monitoring: include the portion belonging to this client month or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Does raising prices always raise revenue?
A sufficient volume decline can offset the higher price. Compare contribution as well as revenue before deciding.
Volume loss is your assumption, not a demand forecast; costs are excluded.
What if this input changes?
If current price rises by 10%, this example changes by 2,090 per month. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.