SCORE Small Business Blog

Adapt or Die
9 Comments

If you are a small business owner, truer words have never been spoken.

When I first began giving seminars to the public, I wanted to undercut my competition and give my audience more content. So I did. Big mistake.

What I didn’t factor in was the cost of the details. We all know that’s where the devil is. It was the little things that added up that consumed my profit margin to the bone.

The cost of the table cloths, name tags, balloons for the outdoor signs, refreshments, security, parking, and the list went on. I had figured in the cost of the room, the advertising, the marketing materials, my staff, but it was the cost of the details that sunk the ship.

Live and learn. If I hadn’t regrouped quickly and done my homework, I would not have survived the year. Adapt or die. That is the mantra of the new business person.

Pricing is a tricky thing. You must consider all the angles associated with the total cost of your product or service as it goes to market. That, my friends, includes everything that goes in to making, marketing, distributing, selling and closing the deal. This rule of thumb goes for a consultant like myself as well as the person who sells widgets.

I often run into budding entrepreneurs that price themselves solely based on the price point of their competitors. Few roads lead to ruin faster than that logic. Don’t get me wrong, you should always keep your eye on the competition, but just like driving a car, if you spend too much time looking in the rear view mirror, it’s more than probable you won’t make it to your destination in one piece.

Pricing is not simply a cost consideration. It is a market consideration. If the market doesn’t bear your established unit pricing, your business will not survive. And when establishing the pricing for your goods and services, consider your profit as a cost item. After all, you’re not in business to break even, you’re there to make a profit.

I am a writer. In my industry, content is king. In the industry of small business, the customer’s perception of value is king. Separate yourself from your competition by adding extra value for their dollar. Creative marketing will get you far. Give something to them at a discounted price while you sell them your primary product at full price. Bundle your services so that you can maintain a fair market value for your product, while providing that little something extra. Everyone loves a deal.

Understanding your customer base is hugely important. What do they want and need and what will they pay for it? When you solve a problem in an affordable way, it generally leads to profits and a budding client list.

I am a firm believer that competition is good. It creates a buzz. A need. Take a look at McDonalds and Burger King. They both sell burgers at nearly the same price point. McDonalds spends millions a year scouting locations for their stores. You know what Burger king does? They follow their competition and pitch their tents across the street. Burger King capitalizes on what is different. They let you “have it your way”. And it works. Don’t be afraid of your competitor. Use them as a bench mark of what works, what doesn’t and what you can do better for more profit.

Get a handle on what it takes to keep your product or service ahead of the curve. Create special promotions, introduce new product offerings, videos, classes, introductions, seminars. You’ve already done the hard work by obtaining the client. Now, the challenge is keeping them.

A client of mine had a small restaurant. It wasn’t doing well despite the fact that her food was out of this world. When she began to offer affordable cooking lessons, she saw her bottom line rise substantially within 7 months time. Pricing has everything to do with innovative thinking and service.

Remember, that what you offer, how you offer it and what package deals you present to sweeten the deal means everything. Capitalize on your uniqueness. Be different. Be daring. Be your competition’s worst nightmare.

Just remember, the devil is in the details!

Tammy BleckSCORE Mentor, SCORE Ventura County
Tammy is an author, speaker, blogger, coach and writer by trade, as well as a Huffington Post contributor, and correspondent for the Jewish Journal. She has founded five successful businesses in her lifetime.
WittyWomanWriting.com | SCORE Mentors | @TammyBleck | More from Tammy

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Discussion (9) Comment


  1. james henryVisitor

    Thank you for the great post here.


  2. sallyVisitor

    We face the $25an hour”creative housewife”that undercuts us–yes they are just glorified shoppers, but even us that are up against the Homegoods shoppers and other designers, are having a hard time competeing on quite a few fronts.Any ideas?

    • Sally, I haven’t a clue what you market so I’d be hard pressed to offer any brilliant suggestions. But social media holds a lot of answers and is responsible for a lot of income being made by entrepreneurs. Home goods and crafts are displayed and marketed brilliantly on Etsy.com and Pinterest.com. Just a thought. Thanks for stopping by, hope you enjoyed the read!


  3. Tana BevanVisitor

    Tammy — You not only are you a Witty Woman Writing, you are a Wise Woman Writing Wittily & Wisely! Wow!

    I like (and understand) the rear view mirror analogy, appreciate learning from your mistake how important it is to include the details (which add up) in your cost pricing, and how to get your competitor to work for you! (McDonald’s does all the leg work, cost analysis, etc., and Burger King sets up shop next door, across the street, or down the road, and does it “your way.”) Lots to learn. Thanks for teaching!

    • Tana Bevan, Kind words, greatly appreciated! Yes, I adore competition. I think we all should. How else can we be better than someone? It provides initiative, creative marketing, fair pricing and a group of colleges that can only benefit from one another. Some of the nicest people I know are my competitors. They are my gift, and I aspire to be theirs.


  4. carol cassaraVisitor

    that should have read actionable information not actual sorry


  5. carol cassaraVisitor

    Wise words that every entrepreneur should listen to and very much in line with what I’ve taught my business students. lots of actual information here– nice!

    • Carol Cassara, sometimes the smartest stuff comes from common sense. Don’t you think? Thank you for stopping in and offering your support. Awesome!

 

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