Resources
1. Putting together a pricing strategy
2. Business survey - free
see what issues other small-medium businesses are facing.
3. 100 low or no cost ideas for employee rewards - free download
4. 'How we do it here' manual'
a Policies & Procedures manual to tailor to your business
5. 'Recruit retain reward' pack
a resource to streamline recruiting and managing people.
6. Hales Douglass Herald - free download
a quarterly newsletter filled with tips, traps and current news items.
7. 25 rules to business success - free download
8. Are your workers employees or contractors? - free download
this important comparison will ensure you are complying with tax legislation.
9. Motor vehicle log book info - free download
10. ATO business checklist... to assist new small businesses - free download
11. Land tax registration form - free download
Essential to complete if your land qualifies.
1. Putting together a pricing strategy
For many small businesses pricing products and services is more a matter of guesswork than logic. Mindful of competitor pricing, they make the mistake of simply undercutting to win business rather than carefully working out the price they need to charge – a price that not only covers the cost of doing business, but makes all the hard work worthwhile by returning a reasonable profit.
Straight price cutting in response to competition is a dangerous strategy, one that can ultimately cut your profits to the point where you might as well sell up. Far better to sit down and work out a pricing strategy that reflects the nature of your products and market, AND makes you money!
Covering costs
The first step in developing a pricing strategy is to work out your overheads. It’s really important to identify absolutely everything that costs you money, including rent, wages, utilities, software, and insurance. Don’t forget to include your own salary in this. Also include the cost of servicing capital assets (loan interest and depreciation charges), including any IT equipment and vehicles that you own.
Market research
Once you have identified the costs associated with running your business you can begin to think about how you want to price your product. To get a feel for the market, it’s a great idea to find out what your competitors charge, though it’s inadvisable to base your prices on this alone because they might be offering a different mix of product and associated services, and their overheads are also likely to be somewhat different.
Pricing strategies
Reaction pricing - lowering your price because the person up the road just lowered theirs - is not usually a workable long term solution. A price war means no-one makes money. And if you position yourself as the lowest cost option you run the risk of customers leaving you when another, even lower priced alternative, comes along. Keep in mind that if your customers perceive your price to be too low, it will make them just as suspicious as when they perceive your price to be too high.
Conversely, it’s important not to price yourself out of the market. So instead of just checking what price your competitors are selling at, evaluate the services they offer their customers and whether they market on the basis of any unique core differentiators. Then consider what you can offer. If you feel that what you can do is worth more than what your competitors offer, price your services accordingly. This is called a premium pricing strategy. For it to work, you need to be able to demonstrate your value to your customers in a convincing way and to get the message out among them.
Be prepared to negotiate your prices to win business. Negotiation involves a little planning but is a useful business tool when used properly. To ensure you’re still making money, you need to build in a premium to the initial price quoted and also determine a price floor under which you are not prepared to go.
Another pricing strategy that’s worth considering is straight discount-for-volume. Loss leaders are also an option, as are two-part pricing strategies. Peak pricing (when you charge a premium for made to order products or for work done at the last minute) is another pricing alternative you can look at.
Price increases
Take your time to do some homework on your product offering and selling points when determining your pricing strategy, because, once in place, it’s difficult to change without upsetting customers. If you are planning on raising prices, it’s a good idea to do it incrementally rather than wait for years and then slug clients with a massive price hike.
The best way to start considering pricing is to first step back and get some professional advice on how you can differentiate your product, improve your marketing and deliver great customer service. Then you’ll be able to consider a premium pricing strategy that cashes in on the things that make you different, rather than fighting it out on cost alone.
Please contact Rob Douglass of our office for further information.
2. Three Frustrations Business Survey
As a community service, Hales Douglass offers the results of this business survey to people in the South Coast, whether they be individuals, businesses, corporations or from government. Approximately every two years a new survey of business people on the south coast NSW will be conducted and a new report prepared. Click here to contact us for a full copy of the survey results.
3. 100 Low or No Cost Ideas for Employee Rewards
Click here for your copy
4. The ‘How We Do It Here’ Policies & Procedures Manual
All businesses benefit from having a written policies and procedures manual. It makes it easier to train new people and it takes the pressure off you having to be there to do everything yourself! And if you’re sick or injured, there’s a manual that your team can turn to help keep your business afloat until you return. Writing one from scratch is a big job. Don’t start from scratch; use the ‘The Way We Do It Here’ policies and procedures manual as your starting point.
This manual contains 82 generic policies and procedures relevant to the running of most businesses and which are ready to be tailored specifically to your business. Included are the 82 draft procedures, a template to use for writing your own new procedures, an explanation of how to do it easily, and all in both hard and soft copy. So if you’re finding being the only person who knows everything can be a trap – why not start your own policies and procedures manual the easy way! Price = $495 (GST inclusive)
5. Recruit retain reward pack
Recruit and manage people with confidence and security. Recruiting the right people can be a nightmare, but by using the proven Recruit Retain Reward system, you can take the pain out of the process and maximise your chances of getting it right.The Recruit Retain Reward pack comes with all you will need including:
- templates
- checklists
- generic interview questions
- reward ideas
- recruitment letters
- warning letters
- termination letters
- step-by-step ‘how to counsel staff’ explanation
We offer the pack in three ways:
- The whole pack ready to be tailored to your business - $650 (GST inclusive)
- Fully tailored-to-your-business pack – includes activity audits and duty statements, performance contracts and performance appraisal forms for each team member (for up to 12 employees) - $1,430 (GST inclusive).
- The Terminator Pack – take the risk out of ending someone’s employment with you – includes best practice counselling process, resource materials about how to terminate a person’s employment as safely and as compassionately as possible, draft letters of warning and termination – untailored - $125 (GST inclusive).
6. Hales Douglass Herald
Click here to join our mailing list.
Click here to download our latest copy.
7. 25 rules to business success
Click here to download your free copy.
8. Are your workers employees or contractors?
Click here to download your free copy of this vital comparison.
9. Motor vehicle log book info
Click here to download tips on completing your motor vehicle log book
10. Small business checklist
Click here to download this valuable resource from the Australian Tax Office.
11. Land tax registration form
Click here to download a land tax registration form from the Office of State Revenue.