Small Business Pulse: Higher costs prompt Westbrook accounting firm to raise rates
Photo / Jen Dean Photography
Tabitha Swanson, founder of the Swanson Group in Westbrook, said the accounting firm raised its rates in 2024 and expects to do so again in 2025.
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Higher costs are weighing on the Swanson Group LLC, a Westbrook accounting firm with 33 employees that raised its fixed and hourly rates this year. It expects to do so again in 2025.
For the second installment of our special series during Small Business Month, Mainebiz checked in with the firm's founder, Tabitha Swanson.
Mainebiz: What's your business outlook for the rest of the year?
Tabitha Swanson: Net neutral. I believe long-term the changes that are happening and will continue through 2024 will be beneficial in equalizing prices in the market to the pre-COVID state. However, to get there, the inflation is going to continue. In the short term, this will mean continued challenges for businesses in juggling increased costs with their own need to increase prices.
MB: What is your biggest business challenge today and why?
TS: My biggest business challenge is juggling the pricing increases with the costs, some increasing unexpectedly without much notice while we only increase our rates annually and the bulk of our business flows in over a few months' period.
For example, the price of one of our software products more than doubled within a month's notice. This increase happened after we released our engagement letters with rates for the year.
MB: What price adjustments have you had to make to your services?
TS: We increased our [fixed and hourly] rates by 20% to 25% in 2024, and I suspect we will need to have a similar increase for 2025. We have continued to see pricing increases on products/services we utilize this year, and our pay for all staff needs to continue to increase in order to maintain a qualified staff to service our clients properly.
Our industry has become more competitive since COVID with the remote worker environment. We are no longer competing only with Maine firms to keep our qualified staff. We are competing nationally.
MB: What concerns are you hearing from your small-business clients?
TS: Many clients are faced with reducing staffing to give their higher performers the pay increases needed to keep them. Businesses that borrow regularly for large purchases are scaling back on those purchases due to the higher interest rates and are juggling expansion needs to increase sales with the need for current cash to manage existing sales.
This is a time when businesses need to consult with advisors and keep a close pulse on their numbers to make the right business decisions to keep them moving forward.
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