As someone who predominantly supports women to follow their dreams this is sort of an uncomfortable post for me to write. It semi goes against the grain but I am seeing it more and more and feel I need to speak out on this subject.
You see many people seem to think that when you start a business the only thing which matters is getting the sale in. That as long as they are selling then they are successful. So when people without business experience start a business they set their prices as low as they can to ‘win’ the competition but what they are doing is creating a lose-lose situation.
They are losing as they have created a business which will swallow them whole as they get busier and busier keeping up with demand. This sounds good but when they finally work out their hourly rate they are working for less than minimum wage (often just a few pounds). From here they have to decide to raise their prices and risk upsetting customers or stick with working like a dog for pence. Neither is a decision I would wish to make.
Or people start a business with incredibly tight margins and then leave themselves no marketing budget, no room for mistakes and no room for growth as there has been no ‘outsourcing’ budget factored in. In this situation the business will fizzle and that “bargain’ business they started ends up being a costly mistake as they did not invest properly from the start.
The other losers are the customers as many of us, especially in this climate, buy on price and they end up sacrificing the chance to make happy memories from purchasing something truly lovely and ending up going for the bargain basement option. Often when people are working at this level they cut corners and do not deliver the quality which people expect. Both parties then end up upset as the customer has not received the quality they expect (the fact they are paying someone £2 an hour is of no relevance to them as they have bought what has been advertised) and the maker is upset as someone is not happy with their work. If only they had priced themselves slightly higher to allow themselves time to make something truly beautiful for the customer.
I once fell into the trap of buying by price. It was a decorator. I knew it was too good to be true but I was saving hundreds so risked it. A decision I regret to this day as the paint flakes off the wooden banister as he failed to prime any of the wood and simply painted over the glass that was there before. Again it ended up costing me more in the long run as I will have to do it twice with the added bonus of having to go through making the really awkward complaints and dealing with the aggressive business owner who blamed my lighting as the reason the paint was so patchy. Never again!
The third looser is the genuine business who has invested lots of time and effort in being the best as they find their market saturated by “hobby” businesses giving others a bad name. So many of the ladies I work with have had to save work made by other businesses as the quality was so poor. When you deal in people’s memories it should never really ever be about price. And isn’t every transaction a potential memory anyway… “Awww remember when I bought that chair/table/teddy.. Brings back so many happy memories”
So please ask yourself when you start a business… do I want to go bargain basement and struggle to ever rise myself out OR start a proper business and be paid for my gifts as I should be?
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