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You struggle in your small business to find the right balance for a healthy operation. This involves pricing your product or service, holding down expenses, and getting the word out--especially on social media.
Optimizing bottom line income is a constant concern. Many of the inputs that flow to the bottom line are always changing. It can be difficult to get the balance that makes sense.
Sometimes, you can avoid getting lost in the weeds by increasing your prices. Upping your prices lets you play in a different ball game. Former problems no longer obtain.
Example: Shawn is an artisan working in leather. He makes belts and handbags. He displays and sells from his own showroom, and he consigns items to a dozen or so additional boutiques and galleries. Shawn wanted to grow, but he did not want to hire people and establish a production operation for his designs--he wanted to keep the business based on his own output. This presented him with a dilemma which he turned into an opportunity. He decided to increase his prices significantly--every product doubled in price overnight. Belts that had sold for $35 were now priced at $75, and handbags that yesterday sold for $85 now had a price tag of $150. As Shawn expected, there was an immediate dip in sales. But three months later, he was earning more on fewer sales.
Example: Sarah runs a hair salon. She has increased her prices to the point that she only accepts two appointments each day. Increasing her prices led to fewer appointments, but she is making more by selling less.
Your pricing goes a long way toward defining your product or service. The marketplace has a wide tolerance for pricing. But, all things equal, the value received by the client or customer is largely perceived to be determined by the price paid.
Of course, no one will pay $100 for a cup of coffee. There are limits to pricing, but many people are today paying $8 for a cup of coffee. Back when a cup cost less than a dollar, who knew people would pay $8?
Whole businesses can be built on the public's perception and willingness to pay more. And existing businesses can earn more by selling less.