Is A Low Price Causing Greed?

When it comes to setting a price, many business owners err on the side of caution and set it on the lower side.

Why??

Does a?Low Price Avoid Greed?

You don't want to appear greedy and/or lose out on potential customers, right?

Since a lower price means a lower profit margin, to compensate, your business must make it up?with more customers and volume.?I totally understand it as I've been there before but here are the challenges that I faced.

It?Creates More Stress and Lowers Quality

1. More volume means a higher?workload.
2. The resulting low margin didn't allow me to bring on more help or invest in needed equipment.
3. Even when I contracted help, the lack of time prevented me from spending quality time on-boarding (training) them.
4. This all created more stress, lowered the quality of service, aggravated my contractors, and made me spend less time with my wife.

Nobody won.

Setting a Low Price?Causes Greed

As I was sharing this experience with one of my clients this morning, he quipped, "So setting a low price to get more customers is greedy."

I stared at him for a moment and laughed. "You're right!"

When you set a low price and have to make it up with more volume only to see the quality of your work decrease, it's not fair to your customers as well as your key stakeholders. A low price causes you to need more while you deliver lesser quality.?Isn't that greedy?

By raising your prices to more closely match the quality of your product/service, you'll have the margin of time and money to address the aforementioned issues. In fact, when I raised my prices at the plea of one of my early mentors, the four issues I stated above completely reversed.

Price Increase Reversed The Stress

1. It decreased my workload
2. The resulting increase in profit margin allowed me to hire more help and purchase new software
3. Felt more like a mentor to my contractors instead of just dumping the work on them
4. Lowered the stress, became more available to my clients even when it was "off the clock," and gave me more time to be with my wife (and play a little golf)

Everyone won and I got my life back.

So how do you know if your price is too low?

If you have any of the four symptoms mentioned toward the beginning of this article, then you may be underpriced.

Do You Need Help?

If you need help trying to figure out what price to charge, here are three options for you.

1. Schedule a complimentary discovery call with me

2. Take the "Priced for Profit" self paced course

3. Take the "Priced for Profit" course plus?two sessions with me

Even if you don't reach out for help, take stock of your present situation.?

If you're feeling like you're on a hamster wheel striving for more sales to dig you out of your situation, you might want to start with assessing your pricing first.?

Here's to your success,

Robert Fukui

Biography:?Robert and his wife Kay Lee run a consulting business that assists entrepreneur couples to create better balance in life and business. If you need a roadmap for greater work-life balance, buy their newly released book,?Tandem:?The married entrepreneurs' guide for greater work-life balance.