The Blog of an Entrepreneur

Posts Tagged ‘consumer spending’

Be Proud of your Price and Service

Posted in Entrepreneurialism on April 9th 2010 | 1 Comment

As I come into work this morning I had an email reply from a proposal I’d prepared for a prospective customer of one of my businesses. The business itself isn’t important, but the prospects approach to me says a lot of things about their approach to business.

The proposal I had drafted clearly demonstrated some time savings we could give to their business, and based on some figures they had supplied me I could also demonstrate a small cost saving too. Not a lot but still a cost saving. The time savings for their business though would be potentially very significant, which to me can be worth more than money itself!

This morning I opened my email and, edited to protect the innocent, stated along the lines of “Your proposal is not viable for our business, but if you half your monthly charges and we will not pay any setup charges we’ll give it a go.”

I was rather shocked by this, even with my bias opinion and complete and utter belief in the service of my company, our solution was a no-brainer for them. Nonetheless, I feel I have something to share about this experience, and one thing that I have previous spoken about regards Getting your Prices Right.

Firstly, how does this person value their time in their business? I’ll give you two examples, the first being an employee scenario of a manager I employ had trouble delegating their work out instead holding onto everything. My response was that for as long as you don’t train someone else up to do your job I cannot promote you any higher in the organisation! What about with the business owner, if you don’t value your time and take steps to allow you to work on your business instead of in your business (same-old same-old) then you are not going anywhere and you’ll always be a lifestyle business. That is fine if that is what you want, but when the time comes to retire if your business completely relies on you then you are not getting much of a retirement fund from the sale of your business. Again, I have covered this in the past regarding Whether Your Business Needs You.

I naturally decided to decline the kind offer to supply the service for half price, because I’m proud of our service and I’m proud of our price. I have researched our competition and I know our position and share of the market. I know the SWOT of what we provide and take that into account, and so long as you know where your business stands don’t let yourself be beaten up on price. At the end of the day you need to make a profit to be in business, and you should be proud of that.

If all you have to compete on is price in your business then you potentially have a problem, don’t let yourself get into that situation.

Are we heading into a recession, or is it Mind Games?

Posted in Entrepreneurialism on May 27th 2008 | 1 Comment

My wife made a fantastic observation at the weekend which to a degree can summarise much of what is happening in the media about the Credit Crunch we are experiencing at the moment, and I think this has a lot to account for with the downturn in the economy.

Her Father is widower on a fixed insurance income and pension. He is not employed, so not likely to get made redundant and has no mortgage. What I want to demonstrate is that he is one the least likely to be affected by a downturn in the economy than anyone.

The bad press and media coverage of the Credit Crunch has worried him, so he has started cutting his spending. When he goes shopping he has stopped buying the extra’s he would normally purchase and is only buying essentials, and when he puts petrol in his car he no longer fills up but only puts a tenner or so in at a time. He is cutting his spending in fear of the economy downturn, despite this downturn having very little overall effect on his personal finances.

All that my Father-in-Law is inadvertantly causing is a reduction in consumer spending brought on by csaremungering of the press and media. By reducing his spending, he is reducing the income into the economy, who in turn are reporting reduced consumer spending to the media, who in turn are spreading doom and gloom stories to people like my Father-in-Law who then cut their spending fearing the worse. Do you see what is happening here? Now put that on a national scale, where hundreds of throusands of people around the nation are fearing the worse and cutting their expenditure into the economy, holding onto their pennies for a rainy day. Businesses then have to pull in purse strings and make redundancies to counter act the reduced spending, which then again leads to ever more bad media coverage of the economy.

Before anyone mentions the downturn in the property market, this was bound to happen. The property market could not sustain unrealistic property inflation which was pricing first time buyers out of the market and making it practically impossible for them to get onto the property ladder. For example, I purchased my first home (a 2-Bed Semi) for £43,000 and sold it 8 years later for over £160,000. How on earth can that be sustainable? The property market needed a reality check, and that is what I believe this now is. It is just a terrible shame that people have to suffer redundancies because of it.