Most small businesses fail within the first or secondary year due to cashflow problems. Cashflow is the Number 1 factor contributing to small business failure and without a streamlined price management process, sustainability is almost impossible. One circumstance for a sufficient cashflow management is to have an accounting system which supervise the cashflow and relinquish information of how much credit is needed and the comparative cost as well as the expenditure and income side of business to manipulate cost and progression to recuperate revenue the cash collection period.
Another thing that could help you increase your business value and manage to stay afloat in this highly dynamic environment is to have a streamlined price management schemes. This means one would have to understand all the cost related issues and make sure that everything works out for you and your business. As business coach David Guest in Melbourne puts it, you should make sure that price management is nicely done in your organization, lest you will be having problems in the future, with less business as well as financial growth. Below are some of the reasons why streamlined price management is of the necessity.
- If you practice a streamlined price management scheme, you end up with a very stable selling environment. With that said, you can gain financial leverage over your competitors and not be too affected by the price wars they dabble in.
- When you are able to streamline your price management schemes, you can focus on profitability, either unitary or by bulk, rather than on volume based income. This allows you to put quality in place, and not just exhaust all means to sell your items, even if the quality is questionable. This gives you the ability to aim for long-term profits rather than quick cash. Even if profits are not that high in the beginning, they usually increase over time. Many other entrepreneurs focus on volume-based profits, aiming for big profits in a short time, which can make them vulnerable to global economic events.
- You can offer the same price to your customer regardless of their location. Price management allows you to better spread your costs over a large clientele and have a standardized price for all your merchandise. Think of the latest products Apple are releasing that are pretty much the same price no matter where in the world you go. This way, you can influence your target market, regardless of their location, to buy your products. This sort of focus and market dominance allows you to have a hefty income at the end of any business year. Also, you need not worry about complaints from customers who live in remote places because you have established a stable price for everyone – something that is highly prized by customers who usually have to pay a premium due to their location.
- If you practice a streamlined price management scheme, you can analyze how sensitive your market is to your offered prices. Rather than responding to your competitors you’re able to focus on your customers the actual people who are buying. This way you adjust your price offerings sensibly and ensure higher profits in the long run.
Your business coach will tell you that price management is a very good scheme to practice in any business venture. In the current market trend, price wars are inevitable, and it is refreshing to note that some businessmen would rather focus on quality and how they can make their merchandise available to more people; than some who are concerned only with making fast cash without taking quality and customer service into consideration.
If you are in Melbourne and want to find out more about how you can put some price management into your business, then talk to David Guest. He’s a business coach with a difference.