Many small business owners in and around Broadbeach, Southport, Surfers Paradise and Bundall believe that by cutting the price of their goods and services, their business will increase.
It an achieve more sales, but it can also affect your bottom line
If your existing customers are already buying from you, then how will they feel if you are selling the same product / service to new customers at a lesser rate? You’ll soon find you have to reduce the rate for your existing customers
Offer Added Value
Do you really believe that your prices are an issue? People are not necessarily buying because your price is too high. It’s just that they may want to conserve their cash o slow down in spending.
So unless you are sure that your price is too high, then cutting prices will not help your turnover. From a bookkeeping perspective, let’s say you sell your services for $100 per hour. You have overheads etc that work out o be $70/hr , so your profit is around $30 .
To make a sale you feel compelled to drop your rate to $80, meaning your profit is now $10 and not $30, resulting in a 66% cut in your profits for a price reduction of 20%
And now your time is worth $80 not $100
When times get tough, and competition increases, have a look at ways to increase your level of service, or offer extra value for money. Maybe you can offer extended warranty, or offer services that really do not cost you anything extra.
We have found many small business owners phoning around bookkeepers looking for the cheapest option. We’ve talked before about the difference between price and cost. A cheap bookkeeper may be a short term solution that can create long term problems
Contact our mobile bookkeepers in and around in and around Broadbeach, Southport, Surfers Paradise and Bundall for a free appraisal of your bookkeeping needs
3rd Quarter: 28/04/10
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