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Low price is the wrong answer…………………

I recently had the opportunity to speak to a group of business owners. One of our discussion points had to do with the purchase of services that, if purchased, would provide very positive support and would make a difference between business stagnation and growth.

I prepared a questionnaire to determine the risk level that these business owners would take when presented with such a purchase opportunity. To summarize the results, the majority of them would not take a financial risk even though they agreed it would be beneficial in the long run.

The purpose of the session was to learn the buying motivation of a group of randomly selected small business owners. I was very disappointed to learn that cost was the major factor. Price shopping for hard goods I can understand, price shopping for services is a mistake.

Let me share some statistics. Many small business owners have created a low paying job for themselves that requires many hours of work and a lot of stress.  There exists an underlying fear of failure and a lack of self-confidence.

Trust was another issue that came up in our session.  Many of the owners have not learned how and who to trust. The consequence of this is isolation in the “business world” which increases fear of failure and further destroys self-confidence. A business strives to build a trust relationship with its target market. It’s equally important that the business allows other services to build a trust relationship with them.

There was a lesson that was learned at the session and I hope I made my point to the participants. Growing a profitable business requires some basic traits:

  • There is a risk in owning a business and calculated risks are essential to sustainability, profitability and growth.
  • Without a two way trustrelationship fear will prevail, and that is another deterrent to growing a successful business.
    • Don’t buy price, buy quality.

Make your business a profit center, not a job.

Nick J. Petra CFP   nick@strategicduck.com      www.strategicduck.com

 

 

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