Businesses, Pricing themselves out of Business.
Do you remember hearing stories of people needing wheel barrels of cash just to buy milk, or a loaf of bread.
Well, in case you haven’t noticed, prices are slowly sneaking their way up to levels that we have never seen before, while most incomes struggle to climb at an even rate with them.
Many people you talk to, just can’t afford to buy the things or the quantities of stuff that they used to and it’s hurting business, big time, while many businesses are starting to raise their prices even higher, so they may recognize larger incomes that exceed last years take.
This practice of raising prices to cover costs, with a futile attempt to stay afloat, just won’t be good enough to save most of them. So down they will go!
You see, when they raise their prices, especially in difficult times as we now have, they actually lose business by doing so. More people will buy less than they did before because of the higher prices and the store actually tightens its own noose by doing so.
In times of strife and famine as we are experiencing in America the businesses actually need to become more creative and actually branch out into other common areas to stay afloat.
For example, I know of an automotive service industry that has made its bread and butter since it’s creation in the seventies. They have always serviced the large automotive suppliers and the big businesses that strictly dealt in automotive parts and supplies.
Doing very well, with just a few downturns every seven years, that happen in that industry. Otherwise always staying afloat and making a good profit.
But now, with everything being affected the way it is, they have learned that they need to gain customers from other areas of industry, in order to maintain just an even income level, much less make a higher profit than last year.
So they have set out gathering new customers from other industries and have diversified their customer base over a wide array of industrial classifications. Some of which are still doing good, while their automotive customers struggle.
They have learned to tap new areas of revenue to make up for their failing automotive customers and it is enabling them to stay afloat while many of their competitors go belly up.
Raising prices isn’t the answer. You must think outside the normal realm of daily operations and get yourself into other avenues that will be more profitable and you must do it fast!
That’s the way to stay afloat people and if you need ideas on just how to do that, just drop me a line and I would be glad to help, at a low price that you can afford!