A Somerset Area Small Business Accountant Thinks This Might Take Some Guts

A Somerset Area Small Business Accountant Thinks This Might Take Some Guts

August 28, 2012

This economy still seems to have some businesses running scared (yes, here in Somerset Area) — and, in this tax professional’s opinion, owners and marketers are grasping at the wrong straws.

I wrote last week about the real way to connect in the midst of seeming negative noise (well, I pulled it from my archives, because it was so pertinent) — and this week, I want to suggest something which might seem a bit bold.

Because I’m noticing a disturbing trend among some of my business owner contacts, and I wanted to encourage you to think differently.

You don’t have to sell based on “price”.

Now look–in some business categories, this *seems* unavoidable, but I’ve got a few “tricks” for you to consider, even if you think you’re in the most commoditized category on the planet.

A Somerset Area Small Business Accountant Thinks This Might Take Some Guts
To start, I would like to immediately make the (perhaps obvious) point that the main motivating reason to be in whatever business you’re in should be profit. Yes, this is controversial (amazingly so), but hear my thinking on this:

If it’s not your motivation … you don’t belong in business–you belong in a non-profit org. Yet as someone who deals with business owners on a regular basis (both as clients, and as friends), I find all sorts of people in all types of businesses who are not primarily profit-motivated.

They have their priorities mixed up. Business decisions made with something other than profit as the prime consideration are almost certain to be bad decisions.

Now look–I’m being a bit strong here, because I want to make a point. Even if you run a non-profit, or have what you believe to be a “different” business, I believe there’s a lesson here for you.

I find that most business people under-price their products and services.
 And it’s my experience that price either isn’t or doesn’t have to be a very important factor in a consumer’s decision or the success of a business.

We should all seek to be positioned at the high-end of a price scale and have our competitors focused on selling from the perspective of being “cheaper” instead of being better.

I know of a chiropractor that is surrounded in his area by other doctors who charge $35.00 to $55.00 less per typical treatment. Yet his practice is bigger and more successful than three of his close competitors added together.

In my experience that’s not an exception–that’s a rule of business. Almost every time I’m asked by a client or friend to look at a business with an eye to help, one of the very first things I encourage is to raise prices or fees. Sometimes the adjustment is pretty dramatic.

Price is the laziest and riskiest advantage to market with. Buying business with lower prices is relatively easy … but keeping business obtained purely because of price becomes much more difficult. So, one way that you can immediately increase profits is by increasing your prices.

You might say, “Okay, Mark, just how do I go about doing that?”

Well, the first (and easiest) answer is to simply do it. If you have a good relationship with your customers or clients, I guarantee you’ll be happily surprised by what happens. It won’t be the disaster you feared it would be.

Another smart strategy is to re-package what you currently provide, into “bundles” or packages, and watch your average transaction value soar.

Lastly, much of this comes down to how you position your business. Are you drawing “price shoppers” with your marketing? Or, do you emphasize relationship and value–which are *not* tied to price? When you put structures into place that ensure a strong, personal connection to you or your staff, you will find that your customer list can weather an increase.

So, try it out–and let me know what you think. You (and your books!) might be pleasantly surprised!

Look, I’ll say again: I don’t pretend to be a “guru”…but I see what works for my most successful business owner friends, and I love seeing their numbers grow!