Expensive or Priceless

by Jason Davies on March 6, 2010

Expensive or Priceless

Economic factors present today are unique and present problems that require special attention and thought. The idea of opening a business and making millions is no longer an overnight venture. The reason why business failure exists is that people are unwilling to change.

The reality of operating a business in 2010 is that you have to move faster than your competition and be able to think on your feet while running. Banks are not lending, and creditors are becoming aggressive, often suing people instead of settling old bills for pennies on the dollar. Hopes and dreams are a thing of the past, unless you learn to change.
Change as a motivating factor makes business fun and interesting and can serve as a method of preventing business owner burnout. The idea of remaining stagnate is a fatal flaw many owners are fixated on. Ever hear, “we’ve done it this way for years and that is why we are successful.” This idea works to a point; certain clients will remain with your business; will your new clients find it amusing?

You can spend a lot of time figuring out how to lower costs of products and services. Many business owners are offering discounted pricing too. These ideas are commonplace but they will not generate long lasting results. The important thing to remember is that discounts hurt your business. Once the discount wave begins, it can turn into a tsunami of death by the end. The issue is that your clients expect you will treat them the way you treat other clients. You need to be fair, but you cannot sacrifice your bottom line.

Focusing on the small picture can skew your perspective on the big picture. An example would be if you run a coffee shop and charge for incidentals such as whipped topping. In the beginning, you had a good thought, “cut my cost of product and expenses.” However, what does the customer think about paying for something they feel should be free? How does the nearest competitor handle the situation? All of a sudden, you are saving money and losing customers at the same time. Is the savings worth the loss of business?

The banking industry offers the same skewed view. Banks exists to make money from customers who will be customers no matter how the bank treats them. Once you sign on the dotted line, the customer service can go anyway it wants because the bank will win. Normally, a business that is not doing well cannot refinance and go elsewhere either. Business owners are at the mercy of the bank and when things go south, the bank may call the loan due, or foreclose on a property. My point is that that when you focus on the small things the end of the road can lead to a huge disaster.

Earlier, I mentioned the topic of discounts. The cascade effect of discounts is about the same as cutting back on the whip topping. I find it interesting how a $1.50 can influence a business in such a profound way. The thing to remember is that if you do not focus on innovative ways to make your business a successful venture and focus on the past, the little details can distract you and make the big picture turn into a disaster.

My job as a consultant is to help business owners see the error of their ways and provide a way out. Nobody knows his or her business better than the owner. The problem with this fact is that many business owners know their businesses so well; they cannot step back and evaluate their situation with a critical eye. This is why a consultant is valuable. If it costs $10,000 to have someone help, you save and make $100,000.00 you enjoy a huge increase in profit.

Many business owners are unwilling to take that step. When time gets tough, they focus on saving the money. They continue their bad habits, and watch their business diminish;  hopes and dreams go right with it. The result in many business closures is a that divorce, or bankruptcy is going to happen. Now I want you to imagine the emotional cost of that happening. Years of your life gone and thousands of dollars later, just by thinking how you could save $10,000.00.

For my critics, I offer you the following suggestion; when you consider how you can save your business; make sure you obtain a qualified opinion. I am qualified, because people pay me to give them my opinion and advice. Those who took the time to listen to my suggestions and guidance are enjoying the fact they still own a business.

You need my help to succeed. I am Jason Davies, president of TechRx and now is the best time to call me. You know you need to change and you realize getting help is the first step. Call now, 920.884.1195. My schedule is filling up fast for 2010.

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