The reason I say it (and this may be somewhat controversial), but one of the main motivating reasons to be in whatever business you’re in should be profit. Yes, this can ruffles some feathers (amazingly so), but hear my thinking on this:
If profit is not on your mind … you don’t belong in business — you belong in a non-profit org. Yet as someone who deals with Long Island and Stamford small business owners on a regular basis (both as clients of Michael J. Kessler, CPA, and as friends), I find all sorts of people in all types of businesses who are not profit-motivated.
Business decisions made with something other than profit as a significant 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.
There are so many ancillary (and wonderful) reasons to be in business. And I love the romance of the mom ‘n’ pop or the startup who creates a magical environment for their staff and customers.
But unless blood (revenue) is flowing through the veins of it, the organization will shrivel and die.
So today might be some strong medicine, but I do hope you take it seriously.
Long Island and Stamford Small Businesses: Charge What You Know You’re Worth
“Sooner or later, those who win are those who think they can.” -Paul Tournier
I find that most Long Island and Stamford area 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 of Team Kessler 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, Michael, 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 Long Island and Stamford 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.
I’m grateful for our chance to serve you and your business — and we are dedicated to its success, in every measure.
Feel very free forward this article to a Long Island and Stamford business associate or client you know who could benefit from our assistance — or simply send them our way?These particular articles usually relate to business strategy because, as you know, we are Profitabiity Consultants also specializing in tax preparation and planning for Long Island and Stamford families and business owners. And we always make room for referrals from trusted sources like you.
Michael J. Kessler, CPA
PS–Join us for our show Business Profits In The Real World Saturday afternoons at 4 on 103.9FM WRCN where we bring you Long Island and The New York-Metro’s most successful business owners sharing how you too can bring your business to among the most profitable in your industry. No radio? No problem! Listen live at LINewsRadio.com – or can’t listen live? Hear our past shows at MichaelKesslerCPA.com