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That’s right. I said it. I know, I know… You’re hungry for new business and it feels good to win a proposal. I know that feeling. I call it the “seller’s high,” like a runner’s high. I’m on top of the world when I win new business.
The problem is when you first start out all you want to do is win. It happens all the time. You need the work and there’re bills to pay and bodies to be nourished. These are real concerns for every new business owner. But at the same time, this can also create problems in the long term. Pricing too low early on in your business is a double-edged sword.
Here are a few of the downsides of pricing too low:
You wreck your capacity. By pricing too low, you create more work for yourself. Think about it. Depending on what your discount is to close these deals, it’s going to take a lot more clients to make a comfortable living. Read more
One way to get me to do almost anything is to call me a chicken. As a matter of fact, just inferring that I’m a chicken is usually enough. I even do it to myself to motivate me.
Which is how I ended up asking for a 100% raise and a $10,000 bonus.
Back Story: Last summer my board of directors asked me to take on additional responsibilities with no additional pay. I knew we didn’t have any money for raises at that time. (Being the company comptroller,¹ I know crap like that.) I’m also a team player, and I didn’t want anybody to think I’m a chicken, so I agreed.
Over the years, I’ve developed a skepticism of brands, a healthy one I hope. And I would venture to say you have too. One ad after another, all making claims to be the best thing ever. Common sense tells us it can’t actually be — we all want to believe that particular cologne/perfume is going to make us instantly magnetic, but we know better. And then there’s one purchase after another; many don’t live up to the hype, some do, some do to begin with, but don’t last. Each of these experiences eats away at our ability to believe, to trust.
Brands can be so impersonal — marketing messages connect us to the brand, and humans become merely the means to get to the brand. Ads create a desire for Cheerios, and supermarkets and checkout registers are just a delivery mechanism to acquire Cheerios for ourselves. The quicker and easier, the better. Products, not humans, are the end. (Or perhaps more accurately, the emotional state promised by the products.)
But brands are real, right? I mean, after all, there’s Coca-Cola, Apple, Southwest, and Rolls Royce. They must truly exist. Or do they? Maybe they’re just made up. Maybe they only exist simply because we all agree they exist. Sorta like language — we all agree this scrawled shape on a piece of paper constitutes a letter, “d” we’ll call it. And we agree that it makes a particular, recognizable sound formed by our mouths and tongues. And when combined with the two other scrawled shapes “o” and “g,” signifies those panting, four-legged furry creatures in our homes. Read more
Moe Szyslak is a crappy entrepreneur. He’s crappy at lots of things, but he’s a really crappy entrepreneur. The only reason his tavern hasn’t gone out of business in the past 26 years is because it’s not real. That being said, sometimes he comes close to not sucking.
In the middle of Season 3, Moe says to Homer, “Business is slow. People today are healthier and drinking less. … If it wasn’t for the junior high school next door, no one would even use the cigarette machine. … Increased job satisfaction and family togetherness are poison for a purveyor of mind-numbing intoxicants like myself” (“Flaming Moe’s”). However, people’s aversion of rats, cockroaches, and Hepatitis B are also poison for Moe’s business. His bar is a dump, but he pins the problem on the business environment. It’s easy to blame business troubles on external forces: competition, stupid consumers, changing regulation, etc. Read more