For any business getting the pricing of your product or service right is crucial. Never fall into the trap of accepting that lower prices = higher sales = higher profits. Sure, by cutting your prices you may well be able to boost your top line sales, but the effect could be to ruin your bottom line profits. At the same time those higher sales mean your'e going to get a lot busier, but what's the point if you're not making any more money?
Conversely, ask yourself the question,"If I increase my prices, what would the effect on my customers be?" Possibly you may lose some..... you know, the ones who are always trying to squeeze the extra 2% out of you, but you're certainly not going to lose them all, and the ones that stay should more than make up for the ones you lose because they'll be paying you more! The result is you'll end up with a leaner, more profitable business, and importantly with more time on your hands to work "on your business" rather than in it!
Make sense? There's actually a formula to illustrate the impact of increasing your prices on your overall sales. In other words "if I increased my prices by x%, what level of sales could I afford to lose before my profits start to go down?" This depends on you current level of gross profit but I'll bet you'll be surprised by the results!
If you want to know the formula then message me here or through our web site with your current Gross Profit margin, and I'll get back to you with the info.
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