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Ep. 78 - Why Fear May Be Costing You Profits

You may be working harder than ever this year yet the profits just don’t seem to be there. In fact, your total revenue may even be up but the profits aren’t. Why is that? It may be a simple fact that you aren’t charging enough. 

If you’re like the majority of businesses out there, your sales price is not high enough and it’s costing you profits. Now you may be thinking that if you sell enough volume that the profits will follow. How’s that working for you? What we see is that the low price just forces the business to work harder. And the kicker is the profits don’t increase. At least as a percentage of sales. 

And if your net profit is less than 15% of total revenue then you have room to increase price. 

Even if you realize you should be charging a higher price there is natural fear of raising prices for a variety of reasons. So this episode is dedicated to helping you get over that fear so you can raise your prices to where they should be and give you a better margin of time and money. 


Check out episode 5 on pricing strategies:

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Key Takeaways:

  • The faulty formula for making profits. Volume cures everything
  • Why you set lower prices than you should
  • Customers equate quality to price
  • Owner fearful of raising prices even when customers tell him it’s too low
  • Why are we so fearful of raising prices to what it should be?
  • Media talks about the greedy business owner
  • Why we’re afraid of raising prices
    • Afraid of price gouging
    • Afraid of complaints
    • Afraid of losing customers
  • How to overcome the fear
    • Look at the big picture
    • Employees to take care of
    • Your family to take care of
    • Customers to provide better solutions for
    • Realize you can’t serve every customer
    • Choose who to serve- target market

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