Price Increase Letter: How to Raise Prices for a Home Service Business
· 9 min read
Try it with your numbers: free house cleaning price calculator
A good price increase letter for a home service business tells each customer three things: the new price, the date it starts, and one plain reason, sent at least 30 days ahead (or with whatever notice your service agreement promises). Before you write it, check how much your own costs went up and how many customers you could lose and still come out even. This guide walks through both, with a worked example for a solo house cleaner, a sample letter and text you can adapt, and answers for the customers who push back.
If you want new prices to start in early January 2027, a letter sent by December 1 gives customers more than 30 days' notice.
Why raising prices is normal (and expected)
Your costs don't stand still. In the 12 months to September 2026, private-industry wages and salaries rose 3.1% and total compensation costs rose 3.4%, according to the BLS Employment Cost Index. The IRS business mileage rate, a decent stand-in for what it costs to run a vehicle, went from 70 cents a mile in 2025 to 72.5 cents in early 2026 and 76 cents from July 1, 2026.
Most of your competitors already adjust. In Jobber's 2026 Home Service Trends Report, a survey of over 1,000 US home service owners, 65% said they had raised prices in the past year. Cleaning businesses were the least likely to do it, at 55%, and only 42% of new businesses did. The most common reasons were inflation (72%) and labor costs (50%).
Step 1: Check how much your costs went up
Don't pick a percentage out of the air. Put last year's yearly costs next to this year's, including the pay you want for yourself:
Supplies and materials
Insurance (liability, bond, vehicle)
Phone, software and card fees
Vehicle (actual costs, or miles times the IRS rate as a stand-in)
Helper wages and payroll costs, if you have help
Your own pay
Add each column and divide the change by last year's total. That's your cost growth. Your price increase should at least cover it; if your prices were already too low, it may need to be more. Your bookkeeping makes this a 10-minute job, which is one more reason to keep the 15-minute weekly routine.
Step 2: Pick the percentage and round to friendly prices
Once you know your cost growth, choose an increase that covers it and, if you can, rebuilds a little margin. Then round each price to a number that looks deliberate ($158, not $157.50). Keep these points in mind:
Raise everyone a little rather than a few customers a lot. Small, regular increases are usually easier to explain than a big jump every three years.
Check your minimum charge and add-on prices too. An inside-oven add-on you priced in 2023 has probably fallen behind.
Use margin, not markup. If you want 20% of the price left over after costs, divide by 0.80; don't multiply by 1.20. Our snow removal pricing guide shows why the two give different answers.
Step 3: Work out how many customers you could lose
A price increase brings in more from every customer who stays, so you can lose some and still earn as much as you would have without the increase. The quick formula:
Share of revenue you can lose and still come out even = increase in yearly revenue ÷ new yearly revenue
A lost customer also saves you supplies and gas, so the real cushion is slightly bigger. Run it customer by customer: losing a weekly customer hurts far more than losing a monthly one.
Worked example: a solo house cleaner plans a January increase
Nora runs Fern Street Cleaning, a fictional one-person business. These are example numbers; use your own. (If you're still setting your first prices, start with how much to charge for house cleaning instead.)
Her cost check
Last year's costs, with the pay she wants for herself:
Supplies: $1,800
Insurance: $720
Phone and software: $600
Vehicle: 6,000 miles × $0.70 (the 2025 IRS rate) = $4,200
Her pay: $50,000
Total: $57,320
This year:
Supplies: $1,900
Insurance: $780
Phone and software: $600
Vehicle: 6,000 miles × $0.76 (the current IRS rate) = $4,560
Her pay: $51,550 (up 3.1%, in line with the wage growth above)
Total: $59,390
Her costs went up $2,070, which is $2,070 ÷ $57,320 = 3.6%.
Her customers and new prices
Nora has 15 regular customers. She picks a 5% increase to cover the 3.6% and rebuild some margin, then rounds:
8 every-two-weeks customers: $150 → $158 (26 visits a year each)
4 weekly customers: $130 → $137 (52 visits a year each)
3 monthly customers: $190 → $200 (12 visits a year each)
Yearly revenue before: (8 × 26 × $150) + (4 × 52 × $130) + (3 × 12 × $190) = $31,200 + $27,040 + $6,840 = $65,080
Yearly revenue after: (8 × 26 × $158) + (4 × 52 × $137) + (3 × 12 × $200) = $32,864 + $28,496 + $7,200 = $68,560
That's $3,480 more a year (5.3%). It covers her $2,070 of cost growth and leaves $1,410 extra.
How many customers she could lose
$3,480 ÷ $68,560 = 5.1% of her new revenue. Now look at what each customer is worth at the new prices:
One monthly customer: 12 × $200 = $2,400. If one leaves, she still brings in $1,080 more than she would have without the increase.
One every-two-weeks customer: 26 × $158 = $4,108. Even counting the supplies and gas she'd save (about $14.29 a visit: $1,900 of supplies ÷ 452 visits = $4.20, plus 13.27 miles × $0.76 = $10.09), that's $4,108 − $372 = $3,736 lost, which leaves her $256 worse off than not raising prices at all.
One weekly customer: 52 × $137 = $7,124. Losing one would set her back a lot.
The lesson for Nora: a modest 5% increase is safe if she keeps her weekly and every-two-weeks customers, and she should be most careful (a phone call, not just a letter) with the four weekly ones. If someone does leave, the hours they free up can go to a new customer at the new price.
The Home Service Pricing Calculator & Price Increase Kit does this math for up to 200 customers, with the new price, the yearly change and the send-by date for each.
Step 4: Set the date and the notice timeline
Pick a start date that lines up with a visit cycle, such as the first visit on or after Monday, January 4, 2027. Then work backward:
Check your agreements first. If a customer signed a service agreement, follow its notice and price-change terms. If it's silent, ask a local attorney before changing a price mid-term. Rules vary by state, and this isn't legal advice.
Card-on-file plans in California: under the state's automatic renewal law as amended by AB 2863 (in effect since July 1, 2025), a fee change for a plan that continues until the customer cancels needs a clear notice no less than 7 and no more than 30 days before it takes effect, with information on how to cancel (summary from Wilson Sonsini). For a January 4 change that's a window of December 5 to December 28. Our lawn care contract guide covers the rest of that law. Other states have their own rules, so check yours.
Everyone else: aim for 30 days or more. For Nora that means letters by Tuesday, December 1, and a short reminder text around Monday, December 21.
Call your biggest customers before the letter arrives. For Nora that's the four weekly clients.
Step 5: Send the letter
Keep it short. Customers don't need your full cost sheet; they need to know what's changing, when, and that you still value them.
Sample price increase letter
Hi Dana, thank you for having me in your home this year. I wanted to let you know well ahead of time that starting with your first cleaning on or after January 4, 2027, your every-two-weeks cleaning will be $158, up from $150.
My costs for supplies, insurance and driving have gone up over the past year, and this change lets me keep giving your home the same care, with the same products and the same checklist.
Nothing else about your service changes. If you have any questions, call or text me at (555) 010-0199. I'm grateful to have you as a client.
Nora, Fern Street Cleaning
Adapt it: swap in each customer's own visit type and price, mention one real reason, and sign it yourself. Don't over-apologize or promise prices will never change again.
Sample reminder text
Hi Dana, it's Nora from Fern Street Cleaning. Just a reminder that your every-two-weeks cleaning will be $158 starting Jan 4. Thank you for being a client! Questions? Just reply here.
Only text customers who have agreed to hear from you by text.
When a customer pushes back
For customers who do push back, have your answers ready:
"Why is it going up?" "My supplies, insurance and fuel have all gone up this year. I held my prices as long as I could, and this keeps your cleanings the same quality."
"That's too much for me right now." "I understand. Would every-three-weeks or a shorter visit work better for your budget? I'd rather adjust the service than lose you."
"Can I keep my old price?" "I'm keeping it the same for everyone, so it's fair to all my clients. I can keep your current price through January if that helps you plan." (Only offer this if you've decided in advance you can afford it.)
Common mistakes
Raising prices without checking costs first. Then you can't explain the increase, even to yourself.
Burying the new price. Put the number and the date in the first paragraph.
Skipping your agreements. A signed service agreement can fix the price or the notice period. Check before you send.
Giving long discounts out of nerves. Grandfathering your biggest customers for a year can quietly cancel much of the increase.
Forgetting new customers. Update your price list and quote templates the same day, so new clients start at the new price. If you sell gift certificates, stating them as dollar amounts (see our gift certificate guide) means a January increase doesn't create arguments about what a certificate covers.
Price increase checklist
List last year's and this year's costs, including your own pay.
Work out your cost growth.
Pick an increase that covers it and round to friendly prices.
Work out the revenue you could lose and still come out even, customer by customer.
Read every service agreement for notice and price-change terms.
Choose a start date tied to a visit cycle.
Call your most important customers.
Send letters at least 30 days ahead (or as your agreement or state law requires).
Send a short reminder about two weeks before.
Update your price list, quotes and invoices on the start date.
FAQ
How much should I raise my prices?
At least enough to cover your cost growth, which you can work out in Step 1. Jobber suggests 3% to 10% for increases driven by inflation, but the right number comes from your own costs, not a rule of thumb. If you are already underpriced, a bigger one-time increase may be needed; explain it plainly and consider giving extra notice.
How much notice should I give customers?
Follow your service agreement first. If there isn't one, 30 days or more is a courteous standard for recurring customers. Some plans that charge a card until the customer cancels have legal notice rules, such as California's 7-to-30-day window for fee changes. Rules vary by state, so check yours.
Should I raise prices for existing customers or only new ones?
Usually both. Charging new customers more than long-time ones for the same work gets awkward fast and leaves your best customers as your least profitable ones. You can raise new-customer prices right away and give existing customers notice.