A business when build perfectly will be successful 10 times larger than most standing areas in the industry. But safety has a significant part in a business especially when the work includes bigger production compared to others. Injury or worst, death change lives and it’s the heaviest effect that can happen in a workplace. Being harmed during work can damage the family of the involved person and of the business too. There will be a need to pay off medical expenses and other support when that happens. As an employer, you take full responsibility of the lives under your hands and your sole purpose is for it to stay that way. You have to make sure your workers go back to their home whole and safe. This is one of the reasons why safety is essential for a business but that’s not the only one.
Safety reduces stress.
Safety and security speak in volumes but if a person is injured while working, not only will you be jeopardizing his or her life but also yours and the foundation of your business. This will create stress on your workers because all they be thinking about is the incident. Until you have figured out what you can improve on your company, trauma will build up each day. Employees will always think about their wellbeing and soon, it will come to affect how they work. But ensuring that they are safe will give a great deal to their productivity and lessen their stress.
Safety is mandated.
There are several laws that strengthens safety in a company. The government has their own departments which looks after the implementation of such a law. These enforcements are a group of individuals that will see through anyone’s health around a workplace and they will make sure to keep it that way. If they ever found out that their safety policy isn’t applied by every company out there, it’s going to cause problems. There is even a huge chance that the establishment will be shut down until further notice.
Safety ensures a hassle free area.
A couple of years back, some states are already legalizing the use of marijuana. However, the primeval practice of such a substance is still frown upon. This illegal item can hinder a worker’s judgement because of its side effects. Thus far, safety has provided a way to stop that from happening. There are certain terms that allows employers to test out their workers. Doing this can clear out the air of suspicious activities and even dangerous actions. A hassle free area is something that anyone would need for their businesses to make sure their company won’t lose anything.
There are still several things that entrepreneurs need to apply on their businesses. Resources such as hard hats, big equipment that can do the job as well as drug test programs are a great help. Safety by nature is an added value, a first step to every companies, and the most important thing that every business worker should always have.
Small business owners often have so much responsibility on their shoulders that they often don’t have much time or energy into really researching effective pricing strategies.
Pricing is one of the four main components of an effective marketing mix, along with the product, promotion and place. In fact, besides the actual product, a company’s pricing strategies may be the main driver of sales.
Many small business owners’ first strategy is to look at their closest competitor’s prices and then decide to go a bit lower. There are many pricing strategies available for small businesses, and this may not be the most effective for your business.
That’s why today we’ll look at the 7 most effective pricing strategies to make your small business more competitive and profitable.
Competitive pricing
Right off the bat, we’ll go with the most popular strategy: the direct challenge to your competitors’ prices. However, effective competitive pricing relies on two conditions.
First, you need to take into account multiple competitors, and not just a single one. Then take their average price and decide if you want to go lower or stay at the same level and offer other benefits.
Secondly, you need to take into account whether your business’ cost structure is similar to that of your competitors. Only then does their average make sense for your business. If your cost structure is different, then your price is too low and you may end up cutting into your own profits.
Customer Perceived Value pricing
Customer perceived value (CPV) pricing is one of the many pricing strategies that require quite a bit of data to work. Essentially, you have to determine the perceived value of your products compared to your competitors’.
CPV is calculated as:
CPV = Total Perceived Benefits – Total Perceived Costs
Here, the CPV is equal to the net benefits of your product or service, converted into dollar amounts.
For example, if a customer is eager to purchase your furniture or consulting services, he may perceive the benefits at something equal to $1200 (including any emotional benefits as well). He may perceive the costs to be around $800.
Therefore, anything between $800 and $1200 would be a fair price, although the lower the price, the greater the CPV and the greater the incentive for the customer to purchase. If you charge above $1200, you will essentially be pricing yourself out of the market.
Cost-plus pricing
Cost-plus pricing is based on your cost structure with margins added on so that you can turn a profit. Essentially, you first need to calculate what your business costs are related to producing a product or delivering a service.
After that, you need to decide what a good margin will be that will allow you to cover your costs but also won’t scare off your customers.
For example, let’s say that a business comes up with the following costs:
Direct materials: $25
Direct labor: $15
Allocated overhead: $12.50
In total, the costs come to $52.50. Let’s imagine then that you prefer to have a standard markup of 30% on all products. That means the final price will come to $68.25.
While cost-plus pricing is one of the more straightforward pricing strategies available, it does have some drawbacks.
It most importantly ignores the competition, therefore the prices may not be competitive enough in the market or even could be below the market value. Secondly, it doesn’t place a lot of incentive for the business to work too hard to eliminate costs.
Captive product pricing
This pricing strategy is also known as the razor blade pricing technique, whereby one item is sold for a low price (or even free) but requires another premium product to work effectively.
In the popular example, Gillette may sell its razor blade (something which is not replaced often) for $7, but a pack of 5 razor blades (replaced regularly) will cost you $20.
As in the above example, the two or more items required for captive product pricing must work together. Gillette razor blades don’t work with any other razors except for Gillette’s.
Similarly, a pillowcase from IKEA (higher price) will only fit IKEA’s pillows (lower price), as they have specific dimensions.
Versioning & Freemium pricing strategies
A common pricing strategy for many services, including SaaS (Software as a Service) businesses is the versioning and freemium pricing.
This involves selling the same services at different prices for different versions.
There is often an introductory price that could be much lower than the medium or higher prices. The introductory price for freemium is free. However, this version is often limited in certain ways. If the customers want to get more features from the service, they will have to pay for the higher version.
This has the benefit of inducting the customer into the service or software ecology. A customer is more likely to continue on with a service if they have taken the time and energy to learn about the service. During their introductory period, the business will encourage the customer to upgrade by showing off the higher features.
Charm pricing
The first of the psychological pricing strategies is charm pricing, a technique commonly employed by the supermarket and retail industry. In charm pricing, products with round dollar figures are reduced by one or more cents. So, instead of a bag of candy being $3, it is now reduced to $2.99.
Although mathematically the difference in prices is only 1 cent, psychologically it has a stronger effect. Our brains view the left-most number as being very significant.
Therefore, while the price goes down by 1 cent only, we see the round-figure price at $3 and the lower price at $2.
For that reason, the effect doesn’t work when you go one cent lower on other prices. For example, if you lower a price from $3.80 to $3.79, the effect is insignificant because the left-most number is still the same.
Prestige pricing
This can be seen as the opposite of charm pricing. Instead of decreasing the price, here the retailer will increase it to a much higher value.
This is most effective with luxury goods that are seen as more prestigious than other comparative products.
For example, women may be more willing to buy Kiehl’s shampoo for $30 rather than a L’Oreal shampoo for $3.97. The round number (and prestigious brand) convinces the shopper that it is high quality.
According to a study conducted in 2015, these prestigious, rounded numbers encourage shoppers to make feelings based on their ‘gut feelings’ rather than any calculation. In the study, the authors discovered that shoppers were more willing to buy champagne at $40 rather than the lower price of $39.71.
Pricing strategies for your small business
These pricing strategies may be very effective for your business. However, again, as with most of them you will need to first be aware of all the costs associated with your product or service. Also, you will need to be aware of your competitors and your own business structure before you consider any pricing strategies.
When you determine the best pricing for your products, however, you will see your sales increase and measurable boosts in your profits.
Author bio: Bernard Meyer is the Head of Marketing at InvoiceBerry, the online invoicing software committed to helping small business owners send out invoices quickly and professionally. You can also find him on Twitter and LinkedIn.
Many entrepreneurs aren’t satisfied with only being the head of a local small business. For many business owners, their true dream is to oversee a rapid expansion of their company into a national or even international brand. However, actually performing such an expansion successfully isn’t easy. It can be a very complex and risky process. With that in mind, you should take all the precautions possible before launching a significant expansion of your company. Here are some tips that can help you prepare.
Set Goals that Are Actually Attainable
Before you launch an expansion, you must first set down specific goals so you can focus on laying the groundwork towards achieving those goals. However, unlike your lofty aspirations for your company, these goals must actually be something that can be feasibly accomplished.
Launching four new locations for your chain restaurant is one such goal. Alternatively, it may be adding ten new distributors for your fashion products or increasing revenue by $1 million. Overall, you need to know where you’re going, and it has to be something realistic. Keep in mind that the largest companies didn’t expand to that size over night. According to Walmart, it took the retail giant five years to expand to 24 stores.
Plan for Sustainability
Even if your goals are achievable with your current resources, they may not be sustainable. Keep in mind that even the big corporations often fail at expansions. As Harvard Business Review reported, Target’s expansion into the market in Canada failed spectacularly.
Determining sustainability isn’t a simple task. It requires significant number crunching. Factors you have to consider include your current infrastructure, your workforce, your suppliers, you distribution pipelines, your management personnel, your financial capital and more. You also have to examine your ratio of debt to equity. Whether or not you can sustain the growth you want with what you have needs to be determined by taking all these factors into account.
Consider Financing Options
An expansion of course needs to be funded. If you have enough funds in reserve to invest into such an expansion, you may be on firm ground. In other cases, you may have to borrow to allow the expansion to be realized. Beyond traditional lenders like banks you may want to consider other options. For example, you could implement marketplace lending. This is a form of peer to peer lending in which individual investors lend funds to borrowers directly. These kinds of transactions have become popular as of late and are mostly transacted through online lending platforms.
Whatever kind of lending you implement, make sure you have a solid plan for paying back the borrowed funds. If you borrow more than your forecasted revenues, you may find yourself in bankruptcy court. According to Fundivo, the number of outstanding loans to small businesses has surpassed 23 million.
Prepare Your Employees
To make an expansion happen, you need your personnel and workforce to on board with your plan. Certain employees may need to be shifted to other locations to oversee new branches. Make sure you alert the employees you have in mind of the need to move well in advance so they can make the proper adjustments with their families to prepare. It can cost up to $97,166 to relocate a single employee.
You may also need to institute new training programs to train employees on how to handle the expansion. Recruitment efforts will also of course have to be made to facilitate your company’s growth. Do the research to determine exactly how many new positions you will need to fill. Some may be full time. However, others may be part time positions or even temporary third party contractor work to complete the expansion.
Overall, you are likely to experience some growing pains as your company moves along with its expansion plans. However, if you have done the proper planning to prepare for the growth in question, you should be able to successfully exit the transition as a larger and more profitable company.
Starting a business is a major accomplishment but you need to make sure that it grows and develops by running it effectively. The way you run your business will have a significant effect on whether or not it will be successful on a long-term basis.
Guidelines for Staff
In order for a business to thrive it needs to have structure. You need to set up guidelines that staff can follow, create policies and ensure that your expectations are clear.
New employees should be aware of the company’s mission and their roles in relation to that mission.
Regardless of how straightforward a position at a company may be, everyone should understand the importance of the job and why they should do it. Ensure that all employees know and understand that failing to comply with standard policies will lead to consequences.
Train new employees and keep track of every member of the team for accountability.
Be Organized
Business owners and managers are expected to be organized individuals and this should be demonstrated within the workplace. Use your organization skills to improve efficiency and productivity. Identify ways to make it easier for people to do their jobs.
Keep your office clean and properly maintained, file paperwork effectively and ensure that the contact information you need is accessible.
Running a business involves making purchases, ordering products and organizing inventory. Make sure that you have all the stock you need and employees have resources for smooth business operations.
You should always be aware of the things that you need to fulfill customers’ needs and avoid overstocking that can lead to wastage. Check regularly to find out whether you need additional merchandise and re-order products when necessary.
Web Design and Branding
Your website gives you a chance to share your brand with the public. People use online searches to learn about individuals, companies and projects. A website showcases your image and what the user needs to know about your products or services.
You control your website and determine the message on it. The information on your website tells users about your brand. Use text and images to reflect the general tone and mood of your business. Web content answers questions pertaining to the products or services you offer through visuals and text.
Financial Management
The financial aspects of business ownership should be addressed efficiently. You may be required to schedule meetings with accountants periodically, prepare financial plans, control the payroll, handle bookkeeping, record receipts, count money, make bank deposits and deal with tax returns.
Healthy Work Environment
A good employer does more than hire staff and pay wages. You need to be a worthwhile example for all employees as you motivate them to be productive. Spend some time with employees and give them a chance to tell you about themselves. They should be comfortable enough to talk to you. Strike the ideal balance between being a figure of authority and an approachable employer.
While creating a competitive working environment can help to increase productivity and subsequent profitability, avoid situations where the workplace becomes toxic and conflict-ridden. Hire the right people for the job.
Bio
Evans walsh has worked as an editor and writer for more than 10 years. He says the highlight of his career has been mentoring upcoming writers and watching them develop their skills. To learn more about web design services, please go to Las Vegas Web Design Co.com.
Moving goods on a pallet is arguably the safest way you can possibly transport your products. Whether you are an individual or a business, pallets allow you to pack everything together tight whether you are sending them to the next town or another country.
Because of the fact that there are very few limitations on what can be sent by pallet, ground shipping in bulk has a big advantage. Your stock can easily be sent and received. How you cover it is always important for both safety and circulation. There are four big reasons why you should consider shrink-wrapping, let’s take a look.
Keeps everything fresh
If you are moving produce or fresh goods then shrink-wrap is the perfect solution. Because it is air tight, using it will keep in the refrigeration as well as stop the arrival of any critters. This can have the added bonus of stopping any bruising or ruining of food because, if packed correctly, it won’t be moving about in the pallets.
Prevent box tears
Whatever you are sending, keeping them well sealed and in good condition has to be the number one priority. Whether they are small items or large, you can’t risk losing anything to a bumpy road or poor packing. Using a tough and durable material like shrink-wrap keeps your boxes protected and reduces the risk of losing items due to contaminants.
No more sliding packages
Due to how pallets are, they are loaded horizontally – usually with a forklift. Accidents are rare but they can happen. One example is that the prongs of the forklift are incorrectly placed and this can be a risk. Thanks to the strength of shrink-wrap, your items will be tight together and weight is distributed evenly so there is no sliding.
No spillages
Pallet deliverycan be used for a multitude of things but if your items are being sent to the Amazon Fulfilment distribution centre or a warehouse, you have to ensure that they arrive in top condition. Whether you think your facilities are well maintained or not, wetter seasons can cause issues and while in transit you need to ensure that no water seeps in. Using shrink-wrap is an great way of keeping all liquids out.
How do you shrink-wrap a pallet?
Once you’ve decided to use shrink-wrapping to protect your pallet, you have two main options when it comes to how to do it.
Heat shrink bag – Make sure it’s snug over the items and pallet and tuck any excess around the corners and edges of the pallet. Then you just use a heat or shrink gun, using a slow back-and-forth motion and then inspect to check it’s properly worked.
Manually applied film – PVC is usually the choice here as it is more common and cheaper than polyolefin. You begin at the bottom, starting slow until the base is strong before building up to the top – potentially heating at the end to finish the job.
