Strict Standards: Only variables should be assigned by reference in /var/www/vhosts/jamesstanley.co.uk/httpdocs/templates/luxon/vertex/responsive/responsive_mobile_sidebar.php on line 8
Blog

Blog

The Accountants for Growth

The fastest way to improve your profits

The fastest way to improve your profits

For any business, when thinking about increasing that bottom line it is normal to immediately think about painful cost savings or improved efficiencies. The fact of the matter is, whilst these procedures are important there is a far easier way to maximise profits which is too often missed….and that is…….increase your prices!


It is commonly known that prices are the single most important aspect in the profit equation.


                If you get them right                      PROFIT


                If you get them wrong                   LOSS


The impact of any price change has two powerful benefits;


(1)    The market does not set this price – you do!


(2)    The impact of the change is immediate.


When considering the potential pitfalls of a price increase, the most frequently raised issue is ”my clients will not tolerate a price increase”, and the answer to that is…..you are not wrong.


Clients do care about prices, but it is not the only thing they care about and they certainly do not care half as much about prices as they care about value for money.


As a business you have the flexibility to charge whatever prices you wish as long as you are offering a product or service that exactly meets the needs of your customers, and therefore providing maximum value to those clients.


The first step is to work through your pricing strategy. Only by this process can you pinpoint the customers you attract and most importantly why they are attracted to you.


From that point you need to find that “Magic Price”. In other words, you need to find the price that will give you the maximum profit.  To achieve this it is imperative that you plan, test, evaluate, plan and test again any pricing decisions you make. No business will get it 100% right first time, making evaluation and feedback a fundamental tool in continuously assessing the impact of any pricing strategies tested.


Once you have found that Magic Price, the essential action to take is to systemise it. It is impossible for any business owner to formulate that magic price formula by memory or judgement. Only by employing an effective pricing system can you ensure EVERY price quoted achieves the MAXIMUM profit.


If you would like to know more about how pricing can boost your profits, particularly how to increase the value of your product or service or learning about menu pricing then give us a call on 0121 706 8585.   

 


 

Follow us on Twitter and Like us on Facebook for more business related tips and information!


Disclaimer

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal or accounting advice and should not be relied upon as advice. Please see our website's terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact us and one of our accountants will be happy and able to advise you on your own particular circumstances.

Understanding your data
Credit note? Refund? What’s the difference?

Related Posts