I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
Does Size Really Matter
|
On a recent networking call with a business investment strategist, I got hit by lightning and I’m amazed it didn’t happen sooner. If you’re like me, you’ve heard and possibly said this one or two or a thousand times before: "One of the benefits of being a small business is that your low overhead enables you to be much more competitively priced." That's because you just don’t have to cover as many ongoing expenses as your larger competitors so more of the purchase price goes toward your profits even when you’re charging less. But when my networking buddy articulates some version of this small business bible chestnut, it’s like someone’s put my brain in the microwave. I'm dazed and confused and get off the call as quickly as possible. Is it true that small businesses incur lower overall costs than larger businesses? Sure. But the idea that lower costs should translate into lower prices is anything but true, and I really can't believe I'm just realizing this NOW! Here’s why that math is no longer mathing for me:
I’m ashamed it's taken me this long to realize the overhead argument is just another false narrative that keeps small businesses from charging their value and baking real profitability into their pricing. Do us both a favor and don’t fall for it! Rather than making the size-price argument, compete on other more valuable differentiators like level of customer care and experience, innovation and expertise, flexibility, and so on. While size can and certainly does matter in many ways, it really shouldn't matter when it comes to determining pricing—at least where overhead is concerned. Have questions or concerns about keeping your offers and proposals competitive? Let's talk it through. Until next time, Sharing is caring. Please pass this message on. Your success is our strategy!No longer want to receive my newsletter but don't want to miss my special offers and announcements? Click here. |
Easily Said & Done
I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
It's a tough time to run a small business—with many economists predicting a recession and all the uncertainty caused by the US government. We've certainly yet to see the impact of the massive federal layoffs and cuts to government programs in addition to other economic issues at play. As a result, many consumers and businesses are already tightening their purse strings and preparing to go without. In response, many of my students and clients have been floating the idea of offering discounts...
Three has an almost mystical symbolism and power whether you're pondering math, music, or spirituality. Our brains just love patterns, and three is the smallest number needed to create one. It's satisfying, complete, and somehow feels "just right" to our minds. That's why it's so powerful when considering pricing strategies, as well. Here are three ways to leverage the power of 3 for your pricing: Sandwich Pricing When businesses offer three price points, something fascinating happens. The...
For quite some time now, I've been teaching entrepreneurs about the benefits of value pricing. (Check out Does Size Really Matter to learn why this strategy makes so much sense for small businesses.) But, I was today years old when I learned about Dutch economist Peter van Westendorp's Price Sensitivity model, which he developed in the 1970s. To determine psychologically acceptable price ranges for products or services, he created 4 research questions to ask target audiences. If you've ever...