Gas Prices Change & So Can Yours- Business Price Elasticity

Sometimes I have to literally hold back my laughter when I first speak to some business owners.

The reason I want to burst out is when I am told this: " I have a decent amount of customers/clients but I don't make as much profit from them as I expect. What should I do and please don't tell me to raise my prices because I can't".

Ha ha ha is what I want to say, but I just keep that to myself. If I think they are a reasonable person I always decide to give them reasons why they need to not throw raising prices out the window.

Obviously there can be a number of factors as to why a business is not profiting on solid revenues besides your pricing. It could be too many unneeded employees or an overpaid staff (not likely in a small biz but you never know).

It could be a highly inefficient set of processes to get things done, or a lack of processes altogether. This is usually the case especially in the throwing bad dollar after bad to useless marketing just for the sake of saying marketing is done. Another bad habit of small businesses and even worse than no marketing at all, which is entirely different subject.

It could be horrible or non-existent customer service and management. Also a big small business problem.

And it could be the lack of savvy in the tracking, reading, and usage of financial reports and metrics. Many small business owners think they are not large enough to utilize these tools. All you need is a 1 person shop and they are most certainly useful. They also don't take up as much precious time as anyone thinks to generate and utilize.

Many of these issues come about from business owners they don't have time or they are too small to think they have issues in these business aspects. Totally untrue.

It's just too easy to say it's unnecessary and not do it because lack of knowledge or desire to educate yourself is an excellent excuse to make other things more important. Things you would rather be doing and/or already know how to do. We all do it.

Don't get me wrong. You should do what you are good at but as an entrepreneur, you can't just stay ignorant to other issues. Either way you need to know enough to recognize problems. The rest can be done by someone else.

Let me get back to the price factor before I go too far off on a tangent. So why do I laugh at the "I will not raise my prices" comment?

Well, first off it clues me in that this business owner may very well have made a non-commodity business into a commodity business. If you provide a service and not an easily reproduced product, you should not be treating your business as a commodity.

With my audience at least, you are not making and selling microprocessors. That pricing says the smaller and faster it is, the more I can sell it for otherwise I keep prices similar to the rest of the competition.

My target audience is selling abilities, customer service, and high value to its clients. That's what they are paying for. With that said, if an inferior competitor is selling his services for $100 an hour, why in the world would you have to do the same or less?

All that says to everyone else is that the inferior guy is smarter than you because everyone knows you are at the same price (or less) and he still has clients. It also says that YOU don't value your services.

Take for example a doctor. If you needed a heart transplant are you going to the surgeon in the cheesy hospital that will charge $5000 and leave a huge scar or the surgeon that is known for doing a great job with an excellent success rate in a state of the art hospital that charges $10,000. Even if your insurance doesn't cover as much.

Seriously, which surgeon would you use? And which surgeon are you?

Think about it. Statistically speaking businesses and most people do not shop on price alone. Actually, price is pretty far down on the list unless that's all you have to offer. If all of your clients buy based on price, you are in the wrong business or chasing the bottom of the barrel type of clients.

So how do you go about raising your prices?

Well I need to leave you hanging on this one. I'll continue in the next post with a couple of hints for you.

To Your Business Success-

George Sierchio
The Consultant's Coach

The Olympics & Growing Your Technology Business

Here we are. 3 days into the latest world wide Olympics. And I hope you, like me, are watching whenever possible to get some amazing inspiration to do what you do day in and day out as an entrepreneur. I was and still am a competitive athlete myself but never at the caliber and dedication as these troopers.

Face it, we are an elite bunch of a slightly different make up compared to these Olympic athletes. From the well know to the obscure, they have something in common with each other.

They have all decided to do what it takes to get their 10 minutes or few hours of fame that comes only once every 4 years. How can this not inspire you?

So how are they like you trying to grow your technology business? Well, to make the decision to dedicate a good chunk of their lives to getting to that Olympic stage, they had to say to themselves "I'm willing to do whatever it takes to be one of the few that will ever get a chance to be an Olympic athlete".

You did the same thing when you decided to open up shop. Don't short change yourself into thinking otherwise either.

These athletes risk a lot to get to this moment and you have also plunged yourself into many risks, dangers, and very dark days to be the owner of a true business. A maker of your own destiny.

Inspiration and drive are a huge part of any entrepreneur's life and you need to take it any way you can get it. Even if you are not a sports fan of any sort, the Olympics are a must see when you take into account what they have gone through for a possibly very short lived moment. If that's not something that gets you going, I don't know what will.

To Your Business Success-

George Sierchio
The Consultant's Coach

Unemployment Rises But Don't Let It Effect You

Hello All-

I had to take a short break after building all of those videos to answer business mastermind questions for all of my technology business owner readers. That took a lot out of me to get it done as quickly as possible.

There are still a few more left to answer that I may get back to a little down the road but those were the main questions I felt I had to answer. I'm finding little time in the last 2 weeks and the same will be the case for the next 2 weeks as I continue to move into a new house (I have been convinced that it is necessary to paint EVERY room and fun to not get outside help with most of it. I think I've been tricked.)

Anyway, I wanted to point out something you probably already know and put my 2 cents into it for you. In most states in our great country, the unemployment rate is on the rise and sitting around the same figures as the big tech bust a few year back at the beginning part of this century.

My advice- Don't get nervous. There are many factors contributing to this, but as business owners, especially in the technology industry, it really hasn't effected you much at this time. In general, it shouldn't effect you at all.

If you keep up with your superior client management programs as well as your marketing, there shouldn't be more than a blip on your radar. Your good clients will still be doing well and they will still need you. They may drop off a little on the spending, but most likely not. This is a time of adjustments to budgets but they still need to spend to survive just like you do. And they will.

Actually, if they are cutting back on people, it's to make sure they can still pay for the necessary work you are doing for them. It may even get you more work since they will be lighter on staff and may need to turn to you. That's why it' important to have a your customer management programs in full gear especially in what can be considered a rough economy.

And the same goes for marketing. You can't just stop it. Besides your current clients, this is the source of your revenue and must press on.

So, keep your head up and your eye on the ball. The game is not even close to being over. revisit your marketing and client management plans to make sure you keep making money.

To Your Business Success-

George Sierchio
The Consultant's Coach