Here we are, with Q3 of 2020 in the rearview mirror, THANK GOODNESS.
Only one more quarter left in this 2020 donkey — but it’s going to be an eventful one.
I get asked a bunch by NoHo Arts District clients and friends what I think the markets will do, and the only thing I can really say is “expect the unexpected”.
If that seems weaselly to you — well, it shouldn’t because the last six months, as we are all aware, have been pretty insanely unexpected.
But here’s something that doesn’t HAVE to be unexpected: making further proactive moves to minimize your taxes for this year.
With an entire quarter left, there is still time to make positive moves to save your Los Angeles business on its taxes — and, of course, on your personal return as well.
But, in the same way that athletes get better in the fourth quarter of their games only because they’ve done the advanced conditioning work to get there, saving on your taxes only comes through planning.
So get with us here: 818-210-5080
Struggling NoHo Arts District Businesses Be Careful With Price Reductions
“Despite your best efforts, not everyone wants to be helped. Make a difference where you can and be at peace with the rest.” -Gary Hopkins
If you’re struggling to re-open your business, and not getting the traction you need, I have a quick thought for you today.
Because with all of the chaos we’re seeing nationally, and here in the NoHo Arts District marketplace too, it can be tempting for businesses to believe that pricing is the primary factor that could be causing re-open problems (leaving aside lockdown restrictions, etc.).
We might hear consumers say, “Well, I would buy it if it were in my price range.” And, that idea tempts many business owners to lower their prices–just to sell more products.
But price reductions more often create more problems than they solve for a business.
That’s because they:
* Decrease net profits
* Lead to the purchase of lower-quality products
* Increase customer demands to drop the price even lower!
* Require even more sales to make up the difference in revenue
* Need a larger quantity of products
And, in the end, there will always be someone willing to go out of business faster than you.
Remember this: price is not a benefit. The close of a sale is not determined by the cost of your product. If you truly “sell” your customers and prospects, they will purchase your products/services no matter what price you determine.
That’s the plain truth — and you’ve probably seen it in your own purchase patterns.
If a customer or prospect doesn’t buy — and they claim the cost had something to do with it — you can guess they probably wouldn’t have purchased anyway.
As a small business owner, and marketer, your job is to sell your products and services. But the actual art of marketing and selling doesn’t have to do with the price of the product.
By the time your contacts find out about the price, they should be determined to purchase no matter what the cost.
So, find “real” benefits (value) to sell to your customers and prospects. Help them to see how great their life is with your product or service, and you’ve got a customer. Point out their current pain properly, and your contact will do anything to get rid of it.
Set your prices and hold fast. If you’ve marketed correctly, you will still have customers anxious to do business with you.
Price gouging is a horrible thing — but, really, that’s a bogeyman that lives more in our heads than in real life.
Charge your worth. You deserve it.
Roland Fink & Co, CPA
Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.