The Right Price: Develop a Market Price Strategy
August 12, 2007
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If your price is too high, you may not be able to achieve adequate market share and lose important sales and profits. If your price is too low you may be leaving money on the table and you might not have enough profit to sustain your operations.
The purpose of this article is to outline an approach you can use to develop a Market Price Strategy and avoid killing a marketing or advertising campaign. Which is central to the overall development of a successful marketing strategy.
Price objections can kill your business. Generally, the less personal interaction you will have with a customer the more accurate you need to be about your pricing strategy. Before we get started lets review the Definition of Marketing. A process by which:
Information about a product or service designed to meet a need – real or otherwise – is presented or communicated to those who have the need. The process can take place in the spur of the moment or be planned. However, the goal is always the same. To get people to consider the merits of whatever is being marketed.
Remember, marketing is communicating the benefits of a product or service. If your price is too high or low, your prospects/customers may not take you seriously or dismiss your proposition outright. The entire purpose of marketing is to communicate and create a perception of value!
Choosing the correct price is essential to creating the right perception of value – this is where developing a market price strategy comes into the picture.
A Market Price Strategy is the art of balancing the role of price as a means to attracting customers and keeping customers. Read more
Applying for a Commercial Business Loan, New Business Loan
July 27, 2007
Applying for a new business loan need not be a unpleasant experience. By eliminating your limiting beliefs and preparing for the meeting in advance you have every reason to feel confident.
Remember, that the bank wants to lend money, they really do. They are in the business of making new business loans. In fact banks love to make new business loans because businesses are very good customers and make a lot of money for them.
Supporting Documents Needed for a New Commercial Business Loan
Your bank will expect to see a complete business plan plus:
- financial projections including income statement, balance sheet, cash flow projections, your resume or bio.
- personal net worth statement (include a separate list of assets and liabilities if there are a lot of items).
- copy of your personal identification and social insurance number.
- copy of either your certificate of incorporation or DBA (doing business as trade-name) registration.
- list of personal bank accounts and credit references.
- list of company bank accounts and credit references (if any).
If you are applying for a new business loan for a business you have been operating, they will also want to see: Read more
New Business Loan 101, Commercial Business Loan
July 27, 2007
Getting a new business loan for a business is simple if you follow a few key points. It still is a little bit of work, but well worth the effort.
If you are looking for a new business loan, you are in one of three different situations:
- Start Up: you have a business idea or concept and you need a loan to help you get the business up and running.
- Established: you have been running for a little and up to now have been able to fund the business yourself. You have made some profits and the growth of the business gas put some strain on your cash flow. A new business loan will help you maintain your growth pattern, ease the financial pressure and allow you to invest in the business based on some ideas you have.
- Re-Financing: you have been running the business and now you find the debt load a little tough to handle. You are profitable but would like a longer term loan to consolidate your payables and perhaps relocate the business by purchasing a building.
New Business Loans 101
If you understand how a bank makes a business loan you will be able to better prepare and improve your chances on getting the financing you need and want. Read more
How Do Factoring Services Work?
July 27, 2007
A factor service discounts invoices or accounts receivables. It pays you before your normal payment terms and before the customer pays. Factoring is an alternative to a line of credit at a bank, and it can be an effective method of raising cash in a hurry.
There are different ways of managing the process, depending on the factoring company. Here are my observations:
- They will review your business, invoices and may even do an audit.
- If approved, they will provide you with instructions on how to do the invoicing.
- You invoice your customers as usual.
- You will send out a letter to your customers advising them you are using this service and that they should pay your invoice to the factoring company.
- Depending on your arrangement, you can choose which invoices to factor. If you decide to use this method you will probably want to get a stamp made so you can indicate which invoices to pay to the factoring company.
Why use a factoring company?
If you are growing quickly, starved for cash and the banks will not lend you the cash — factoring is a way of getting the cash sitting in your accounts receivables into your hands. The cash can be helpful if you need to buy inventory or buy raw materials to build more goods for your growing business.
However, if you are using these funds to pay other bills, you may be in too much financial trouble for it to solve your problems. Also, if you have signed a loan agreement at a bank, it probably states that you need permission to use other forms of financing.
Improving Management Of Your Accounts Receivables
July 27, 2007
Your collection period for accounts receivables depends on four factors:
- economic environment;
- recession;
- season of tight credit;
- your credit policy.
There is only one item on the list you have total control over – your credit policy.. The general economic environment is beyond your control – concentrate on what you can control.
Important Decision
Before you consider completely revamping your credit policy you need to consider your company’s investment in accounts receivables — all credit you grant has an associated opportunity cost. Cash you have tied up in your accounts receivable is not available to be used elsewhere.
The most important decision you have to make is the amount and terms of the credit you choose to extend to your customers. There is a delicate balance to maintain.
The tighter your credit policy you will have less cash tied up in accounts receivable and fewer bad debts — however, this could also negatively affect your sales and reduce your profit levels.
Volatility Factors – Size & Number Of Accounts Read more
Getting the Price Right
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