A price rise falls straight through to profit. Nothing is consumed on the way: the same work is done at the same cost, and the difference is kept.
This is why a small increase moves profit more than most people expect. On a ten per cent margin, a five per cent price rise roughly halves the gap to a fifteen per cent margin, because the cost side has not moved.
What it costs
Volume. Some customers leave, and the question is how many, and which.
The arithmetic that decides it: at a ten per cent margin, a five per cent price rise can afford to lose around a third of volume before it is worse off. At a forty per cent margin it can afford far less, because each lost job takes more profit with it.
Working this through requires knowing the current margin, which is what gross margin and break-even are for.
Signals that price is below where it should be
Winning nearly every estimate — see close rate. A close rate near the top usually means the price is not being tested.
Margins falling while revenue rises, which is volume without profit.
Costs having risen since the price was set. Materials and wages move; a price set two years ago is being charged against today's costs. See pricing adequacy.
Applying it unevenly
A rise need not be uniform. It can apply to new customers only, to the least profitable work, to a particular service, or to jobs beyond a travel radius.
Uneven increases are frequently better than a flat one, because they raise price where it is least likely to lose work worth keeping. Which work that is comes from job margin.