Financial Planning: The Scars of a Sale
I see it everyday. A sign in a dentist office declares “Any treatment—40 percent off regular price!” A local Realtor advertises lower commissions: Any house. Any price. Sound intriguing?
Of course it does. We all like to save money. But, remember what a sale does to the value of your products and services. If you could get a product or service 50 percent off if you just waited a few weeks. Why wouldn’t you?
What Sales Do to Your Business
Everyone wants a deal. But certain people shop specifically for the lowest price. They are less loyal. They don’t care about the quality of what they are buying. You can’t build the business you want with these clients.
That’s why it’s important as a boutique business owner to ask yourself, Who is my ideal client?
The client who values a high-priced luxury automobile may not value organic foods.
The person who values racing bicycles may not value custom artwork. It’s not about demographics (age, income, gender); it’s about what is important to people.
When is it okay to have a sale?
1. Fleeting inventory.
3. Inventory Closeout
7. The Partner Discount
What you should never do!
1. Panic Sales: Customers can smell desperation. A panic sale will not only devalue your brand, but also the sale numbers don’t allow you enough profit to continue operating your business the same way.
2. Social Sales: Groupon and other online sites or group buying memberships are great for driving customers to businesses. However, the sales they run are typically far too aggressive from a pricing standpoint for a boutique business to maintain that level of business.
Questions to ask you self:
1. Do you have any inventory that is fleeting?
2. Do you have any products and services that make sense to bundle?
3. Do you have times of the year when it makes sense to close out inventory? If yes, put it on your calendar and put it in your financial planning folder.
To get more tips on pricing, marketing and branding a small business that can charge what you’re worth, download a free chapter of my New York Times Best Selling book, Worth Every Penny: Build a Business that Thrills Your Clients and Still Charge What You’re Worth at http://www.wortheverypennybook.com/try-a-chapter/