Most small business owners are afraid to raise the prices. There is even more fear right now in the marketplace due to the backlash over Netflix's new pricing model. The worry is that their customers will then stop buying from them and go elsewhere. In fact, when starting a business, many entrepreneurs would prefer not to charge anything at all!

For many companies, unfortunately, lowering their price becomes their only marketing strategy. They believe in the supreme law of economics: The lower my price, the more of their product they will sell. But the corollary to this economic law forgets about profit. More product may be sold, but can the business still profit? In this world where there are fewer geographic barriers to entry, competing on price makes your product or service a commodity. This is not where a small business owner wants to be since there will always be someone somewhere in the world that can produce it cheaper than you.

Forget price as a marketing tactic and instead begin thinking about strategies to raise prices. Here are five strategies to raise your prices and increase your profit right now:

1. Price to pain

Consumers will always pay to solve their pain. What is the value of the pain being solved? Charge enough money to cover this. Exhibit A: Why can movie theaters charge $4.75 for a bottle water when the consumer can get 32 bottles of water at Costco for the same price? Location, location, location. A company can move from being a commodity by changing time or place like the movie theater or food on an airplane.

2. Price to premium

Even in a difficult economy, premium or luxury goods are still selling well. For example, Killerspin, a premium maker of table tennis equipment sells their branded “Revolution” table for $3,500. This is in contrast to paying $200 for an entry level table at the local sporting goods store. People buy it not just for table tennis, but as a prestigious piece of furniture.

3. Price for better class of service

Some consumers always pay for better customer service. Think a fancier restaurant, a suite hotel or first class airplane service. Eslide, a presentation design and visual consulting firm charges a value based rate structure by having a higher price for work that needs to be completed for the customer faster. The tighter the deadline, the higher the level of service needed to meet the deadline and therefore the rate goes higher. This allows eSlide to have the expensive design talent available when customers need them to meet critical deadlines and still run a profitable company.

4. Price annual raises

Consumers have become conditioned to prices going up every year. It is far better to raise company prices a small amount annually than do large increases. This will condition the consumer that the raise is always coming. Health insurance, rent and college tuition are good examples of this type of model that go up (sometimes a lot) every year.

5. Price with surcharges

Special market volatility produces temporary surcharges. A raise on gas prices have necessitated a wide variety of fuel surcharges. When wheat prices were rising rapidly years ago, some restaurants even had a surcharge on bread. While this will not be viewed by the consumer as positive, if the issue that the price raise is based on is widely seen as a problem, then they will accept it for a short period of time.

How have you successfully raised your prices this year? If not, isn't it time you did?