What is the number one thing most turnaround experts do [to begin] to right a fledgling business? This blog gives you that answer absolutely free of charge.
What would a turnaround expert most likely do if they were to come in to turnaround YOUR business? One answer could be “well, it depends“. I’m certain this may be correct, however, even with that said; the number one action taken by turnaround experts would be to raise prices wherever possible.
This is not to imply they would increase prices across the board on all of the products and services. But, they would increase prices as far and wide across the product offering as possible. Each added dollar of a price increase makes a contribution towards improving the bottom line.
I realize this may sound much easier said than done. However, I will say from vast experience; it is also far easier to do – than not to do this – the consequence of not doing rapidly outweighs the fear of doing.
Let’s face it; a company in need of turnaround is usually under financial duress. So turnaround experts raise prices without fear because the situation is where there is little to lose by raising prices. If they do not raise prices, the business will most likely fail anyways.
Furthermore, the reason the experts raise prices is because it is a fact most businesses undercharge for their services. There are many reasons for this fact such as misunderstanding, fear, poor math, etc.
In my book The Magic Pill © I devoted a chapter to pricing. In a nutshell, I outline the need for understanding our costs (both direct and indirect) plus illustrate in simple math to show the percentage used for mark-up on costs must always be greater than the desired margin.
Furthermore, I address the importance of having belief in our own prices. Self-confidence, self-worth and the prices we charge all go hand in hand. I have seen far too many businesses in too many industries discount their prices long before the prices have even been revealed to the customer. Why?
You must believe you are worth the prices you [need to] charge and that your customer(s) will value the unique service and value-added customer experience you will deliver.
I have had the fortune of working in and with many start-ups and turnarounds. I will say that working with a business in a growth stage, or one on the rebound, energizes me far more than maintenance.
Be confident in the service you provide and the prices you charge. Enjoy the journey!