Pricing & The Economy

Dear Business Owners,

Welcome to another great week!

How was last week??Hope you did something that moved you closer to your goals - no matter how little.

Let’s remember in goal accomplishment, consistency is the name of the game, just keep moving!

Quick Question:

How often can you increase the prices of your goods and services?

I got a call last week from one of my consulting clients and she was really worried about her pricing methods bearing the mind the rising inflation rate in the country. I listened calmly and understood completely because I run a service and a product-based business too and I see how the cost of everything has impacted businesses nationwide (and globally).

However, there is one factor that we need to pay attention to:

The Customer

The customer's purchasing power isn’t particularly increasing in direct proportion to the inflation rate in the country. What this means is that you cannot increase your prices without considering this.

What then can you do to remain profitable in this economy beyond increasing your prices in the market?

1. Review your cost of operations: How much is it costing you to run your business? Cost of rent, inventory, tangible and intangibles. Consider if some of these things can be done at a reduced price or taken off completely from your cost line item.
2. Review your team size/deliverables: Review the size of the team you currently operate with. Is everyone on the team relevant at this time? Can roles be merged? Can some roles become hybrid or fully remote to reduce the cost? Consider these to help with business operational costs.
3. Research more affordable alternatives for your production of items: If you are in product manufacturing or sales it is time to do some more research on the cost of raw materials and manufacturers. A lot of times we get very comfortable with the people who currently render certain services to us that we do not do a price check to see if there is something better obtainable in the market.
4. Review your market and ensure they are still your market: I would like to announce to you that the person you defined as your customer when you started might not be the same customer you are providing value for due to the changes in the economy. Check this out and it might indeed transform your business.
5. Create recurring income models for your business: For me, one of the areas I like to dabble into is how to create recurring income for businesses so you are not always waiting for the next person that pays. How can you create buckets that provide such value? Think about this.
6. Collaborate more to reach new markets: Collaboration is the best form of marketing now to reach more people and save costs. If you are not yet collaborating, you are not yet growing. Look within your circle who you can collaborate with to help you reach your goals this year.
7. Communicate with your customers: Communicate with your customers often. It shouldn’t be only where there is a price increase that you reach out to them. Have that rapport and mode of communication that helps them truly understand what is happening with the business periodically.

So, which of these 7 points are you going to consider this week?

In all honesty, prices will go up from time to time but it is important we also control the variables around the cost of doing business as business owners.

Have an amazing week guys, and let me leave you with this quote:

“The difference between who you are and who you want to be is what you do.”

— Anonymous

Looking forward to your messages and remember to share this newsletter with another business owner.

Have a great week ahead!

- Nkechi