There are three factors which contribute to the value of your small business products or services. These three factors are, quality, price, and service. Normally, pricing is the source of much thinking, research and anguish for the small business owner. Prices are set using a process called “reverse competition.” the prices of competitors products and services are collected and analysed. Then, price is chosen somewhere near the middle. The thinking behind this decision goes like this, ” We don’t want to be the most expensive and we don’t want to be perceived as being cheap, so we’ll set our prices somewhere in the middle. No one will complain that our prices are too high and no one will have the perception that we are at the bottom of the market.”This is flawed thinking because it sends exactly the wrong message to your existing and your prospective customers. The message you are sending when you set your price in this fashion is, “We are middle-of-the-road, and we have price positioned our business in the middle of all the competition.” When you do this you have wasted an opportunity to create a strong point of difference in what you are offering. Given this sort of pricing policy, it is extremely difficult to differentiate yourself from the competition. It is also very difficult to make a reasonable profit.An important point to remember, as a business owner you are often more price conscious than some of your customers and potential customers. There is always nervousness when you increase your prices. This is because nobody likes to be told that they are too expensive. It is sometimes very difficult to know what’s going on in the minds of the customer. The only way to find out is to ask them and hope that they tell you the truth. Sometimes, the truth can only be seen in their behavior as they turn down our offer of goods and services and say that the price is too high. What this tells me is that the value of the products and services have not been well communicated to the customer. When customers complain about the price, it is often a business bluff as they try to persuade you to reduce your prices or give them a discount.All businesses offer some combination of quality, price and service. Nowadays, the minimum levels of quality have become a clear expectation. Quality alone is no longer an effective way of differentiating your product. If you’re trying to sell your service or products based on quality alone, you are likely to have some difficulty. This is because your customer sees you as no different to the competition because everybody’s saying the same thing.There is no future competing on price. This is a certain way of reducing your profit unless you specifically position yourself as a high volume, low cost provider of services or products. The only sensible strategy is to obtain premium prices for your services. No matter what you charge, there is always someone, somewhere, willing to perform the work you do or provide similar products for less money and supply a lower level of service.Customers are not necessarily price conscious, but they are value conscious. They are actually looking for providers of goods and services that make them feel they are getting exceptional value. This means that the person or business providing the products or services must be able to let the customer perceive the full value of what’s on offer.The biggest problem associated with charging premium pricing is in our own minds. Have you heard these sorts of comments. “I will lose all my customers, if I charge higher prices.”As long as you maintain that belief, you’ll find it very difficult, in fact, almost impossible, to make the transition to high end pricing. The solution is to truly believe the value of what you’ve got to offer and be able to articulate this to your potential customers. If you don’t believe the value of what you offer why should your customers believe any different?The third part of the equation is your service. In today’s competitive business environment, service is the component that differentiates the successful companies from the average ones. Most people, will pay a higher premium for excellent service. They want long-term associations with businesses that have a level of service above and beyond what is generally accepted as being normal.Successful businesses have recognised that they are in the relationship building game and their objectives are to do things that strengthen relationships with existing and potential customers.It is this part of the quality, price and service equation that gives the greatest opportunities be different. No other organisation can copy our personal style at creating and strengthening relationships.It is fairly obvious that the businesses that build the relationships will outperform the businesses that don’t. In spite of this, many businesses operate in such a way that they fail to provide any degree of service to their customers. This means that there is a constant “churn” of customers to be replaced at great cost through extensive advertising.At some stage in business, you will encounter resistance to the price that you are charging. It pays to remember, that some people just complain about prices as a matter of course because they feel they are obliged to. As soon as this happens, help the customer to understand the full value of your service and the benefit they will get from it. If your customer can’t or won’t understand the full value of your service-don’t have them as a customer-sack them!
If you are looking for a do-it-yourself type of business and you have an artistic flare, you might consider starting a business with creating gift arrangements of candy bouquets. Candy bouquets are becoming very popular and are the perfect unique gift for all occasions. Everyone loves candy and everyone loves these sweet delights.Getting started in a candy bouquet gift store is simpler than it seems and getting started online is much easier then opening a full service retail store. In getting started online, there are 10 general steps I used which I will identify below: Step 1: Choose your form of business organization. You may choose between sole proprietorship, partnership, limited liability partnership, corporation and etc. Step 2: Choose a name for your business. You will want to keep three things in mind here. First, choose a name that is fitting for your product and if possible have your product name in the business name. Second, keep it simple and make it something a customer may remember. For example: If someone was selling widgets, they may pick a business name “Widgets by Sam” or maybe “Cool Widgets for Websites.” Third, not only should your name be fitting it needs its own brand or its own identity to set yourself apart from your competitors. Step 3: Obtain business licenses and permits. Each state has their own requirements so contact your state business licensing department. In my state of Minnesota, you fill out a form and pay a business licensing fee, and you list it in a newspaper as a new business. Others states may require additional steps. Step 4: Create and write up a business plan. You can find many templates to help you create and write up a business plan online. They will identify all the areas you need to consider such as products you sell, market, demographics, financing options, goals, etc. This document is critical in pulling together a plan of what you are going to do and how you are going to achieve it. You will also need a business plan should you need financing. If you choose to go the route of an online candy bouquet store, there is a minimal investment up front. Your up front investment would generally be for inventory and office equipment or supplies to get started. Step 5: Determine funding and financing needed. Take the business plan you created to a bank or look for investors if you have determined you need financing. Each investor will want a copy of your business plan to take a look at all the details of your business. If you have determined it is a minimal investment which you have funding for then you will not need to go to a bank or seek investors. Step 6: Determine insurance requirements. Contact a local insurance agent to get quotes and determine what you feel is best for your business needs. They will work with you and keep you informed of your options. Step 7: Set up a business checking account with your personal bank. Since you already do banking with them, you should be able to set up an account rather easily and at minimal cost. Step 8: Purchase your startup inventory. Your business plan should have identified the products you will be selling, suppliers, and costs associated. Determine and order your startup inventory needs. Step 9: Create business products. You will need to create your candy bouquet arrangements, brochures, business cards, etc. You may want to start small and as you expand add products to your business. Step 10: Setup your online website or hire someone to do that. Advertise your business. You may choose to advertise locally through newspaper or radio. You may advertise through internet marketing. All ways of advertising should be considered. In conclusion, these 10 steps should help get you started in starting your own venture into a candy bouquet business. Here I cut it down into 10 smaller more manageable tasks. These steps are a guide to help you as you begin and get started.
After opening her small business, owner S. Palmer of Get The Connection, wondered how to price her products and services. If you are in a business already or just starting one, you may be struggling on how to price your products or services.As you may know, price depends on supply and demand. A strong demand with low supply can command a high price while a strong supply with a low demand can lead to lower prices. A good business model will include a range of products and services as well as pricing to give your preferred clients/customers a choice.There are a variety of reasons why a company may price a product or service at a ridiculously low or high price; but, on average, you want to price your products or services so that you make a profit for your business.Consider these factors when pricing your business products or services:o Research Your Competitors. Study your competitors. If they have products or services comparable to yours, review their products and think of ways on how you can command a higher price.o Consider Your Hard and Hidden Costs. Factor in hard costs (production costs, cost of materials, utilities, marketing costs, space rental, etc.) and remember to include the hidden costs, such as the amount of time you can collect your accounts receivables. If your clients purchase your products in installments or after 30 days, then charge a higher price. You could have invested that money and could have earned an interest if you collected it earlier. The interest income is the hidden cost.o Test Your Market. Know the marketability of your product to know its demand. Test it first with your closest clients. Offer a free trial in exchange for their feedback. See if they will also provide early testimonials for your product or services to be used in early promotion of the product. As your product or services grow in demand, you can slowly increase its price.There are many pricing strategies to consider based on the type of business. Some of the more popular ones include Prestige Pricing which is used when location, exclusivity, or unique customer service justifies the higher pricing. Psychology pricing is used when prices are set at a level where the consumer believes the price to be fair. The most common is called Odd Pricing that uses figures ending in 5, 7 or 9. If something is marked at $8.95, consumers tend to round down to $8.The key is also to remember that marketing your products is just as important (and often times more important) than your pricing strategy.