The next few posts of mine will relate to what people do to fix business slumps and how their solutions can either make or break the company.
I’ll use some real life examples, because I think that these, which have come up a lot as I deal with clients, are pretty common among new business owners.
Scenario: You just start out. You’ve done your research and based the price of your services or products on other companies that offer the same services (or, I hope that you have, because if you have not done your research in this area chances are you will start off on the very wrong foot and it may be hard to climb out of this if so). Your site or shop goes live, you advertise, and you get no hits. You immediately decide to change your prices.
STOP! Before changing prices, you need to step back and do some research and thinking.
Business owners who first start off should be researching prices all along. You compare your products/services to those that are similar and you set a price based on what yours has that is similar to theirs and what yours has that isn’t. For instance, you make children’s jewelry and you are selling a unique stone. The pieces should be priced close to similar pieces, but if that stone makes the item very unique you may be able to price a little higher. Research will tell you what people are paying.
How can you research? Visit similar sites. Compare to similar products. ASK people! Get out on the streets, show them your products and ask. Do some test runs. It is always vital to a new company before opening the doors that you do some testing. You’ll have to test your website, you should be testing your prices, and you should already have tested what you are selling!
I see so many business owners open the doors on day one, not have a customer, and then decide to make drastic changes to their prices. Not a good idea. First of all, you should never make changes like this without first doing your research. if you took the time to research prices in the first place, then you will know if you are being ‘fair’ or not. If you aren’t, then a change might be necessary, but if you are in the ballpark of everyone else, you should not consider making changes in your pricing after just one day.
In the next post I will address making too many changes too quickly, which is another large problem I have encountered with new business owners who are nervous and afraid that they will not see sales.