One of the major
obstacles we face in growing our businesses is learning HOW to ACCURATELY PRICE
our product or service to make a PROFIT!
There are several factors involved in making
our pricing decisions. Some factors are logical and some are not. Today I want
to talk about internal barrier that many small business owners have, especially
women.
Trained as consumers from childhood on, we
forget that we are business owners and we have to set our prices accordingly.
When we set a price. we may secretly think" that's too much too charge and
the PROFIT is too HIGH" and we 'lower the the price.
The selling price of the product has to take
into consideration, not only the costs of product, (labor, material,
transportation,etc) but the costs of running the business and a profit. Without
PROFIT the business does not grow and thrive.
Another factor to consider is how women are
use to sacrificing themselves and putting others needs first. This often leads
to the owner taking a low salary or none at all. I ask my clients if you had to
pay someone to do all that you do in the business how much would that be?
Usually they laugh and reply, "a good deal more than I pay myself".
Low balling your salary does NOT give an
accurate cost of running your business. It does result in two negative
results:
First, it does not SAVE money It often creates
personal cash flow problems. Which in turns creates problems with creditors and
family members.
Second, it does not give an accurate picture of
what it costs to run the business. And that leads to low ball pricing which
leads to no profits and builds stress on the business
It is time to put a "true value" on
your contribution to the business and give yourself a raise that is reasonable. If you raise your salary $1,000 a month that
translates roughly into $5.00 an hour based on a 200 hour work month. And I
know most of you work at least 260 hours a month.
Remember you are a business owner, not a
consumer. and its time to put yourself into the equation of success.
Best wishes for a successful and growing
business.
JoAnn R. ForresterS.I. Business Associates
412-440-6969
