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Watch Out for These Serial Killers that Can Murder Your Bottomline Figures (1st Part)
Running a business or a company is not always about passion. If I were to describe what “mere passion” is, I would always recall the audition of Ms. Valentina Hasan for Bulgarian Music Idol back in 2008. When asked what was her song piece, she answered, “Ken Lee of Mariah Carrey” without batting an eyelash infront of the judges – to which she meant, “Can’t Live” but the correct title of the song was, “Without You”. As far as I could remember, I thought it was her strange way to get the attention of the judges but when asked to sing, she sounded jibberish but she still claimed that it was English.
Here, my dear friends is an example of a full-spirited individual who has the courage to be infront of the judges and there, we saw passion. However, passion will only be short-lived if we have not cultivated our potentials completely. As business owners, you must learn everything about your business, its needs and what tremendous efforts it demands of you or else your business will cease to exist.
- High Suppliers’ Cost
Take time to source out and compare rates of various suppliers in your area. Choose the suppliers that are of great quality and can provide high sustainability for your business. Negotiate for better prices. Try to buy in bulk so you can ask for more discounts.
This profit-barrier is noted well by Mr. Robert Chua, a Yakimix Cebu Owner. As we all know, Yakimix offers a wide selection of smokeless grill buffet nationwide. It has opened its first branch in Cebu City but 13th in the Philippines. They buy all their food ingredients directly to their suppliers, like for instance their seafoods which are usually bought from Pasil, the island’s dropping off point for fish and other seafoods in the island. The group of Mr. Chua usually go there as early as 2 a.m. to be able to get the best deal of prices for their restaurant. Thus, it gives them more allowance to earn more in their daily operation.
2. Lowering Your Prices
If you need to compete on any business aspects with your competitors, please skip the price behind. Instead of attracting your customers to your best-cut-off-price-ever, why don’t you just add more value to the other non-monetary equivalent of executing your business. What are these? These are your company’s time, effort and emotional cost that if you do so well, your customers won’t be just happy or pleased with you but rather, they will be your marketing representatives because they will tell these to all other people in their network.
In what ways can we see these into action among many businesses? Well, there are a-plenty.
- It’s like going on a shopping with your toddlers and leaving them in the Kid’s Corner of the Department Store where they can play, watch their favorite Barney Films or participate in an interactive story-telling with one of the Department Store’s sales staff. These experiential activities prevent your kids from falling into tantrums because when they do, it spoils your shopping momentum and makes you want to go home.
- It’s a hotel that never forgets to greet a customer a happy birthday via email or any social media platforms that make him or her feel important. If s/he is checked-in in your hotel, surprising him or her with a birthday greeting and a complimentary cake will surely give his or her day a lift.
- It’s a transportation system (rent-a-car or rent-a-van) with packaged snacks for the whole tour already and a complimentary newspaper or travel magazine.
- It’s a restaurant with a complimentary soup to lessen the stress of hungry waiting customers because the main dish really takes 15-20 minutes of preparation.
- It’s a furniture store with a lifestyle product display that can make every visiting customer speechless because they can readily imagine how it would look like at the comfort of their own home.
- It’s a coffee shop where your customers get to read books, magazines and even graphic novels or mangas during their coffee time.
If you must, capitalize on time, effort and emotional cost that increase customer satisfaction through experience without lowering your price.
3. Promotional Discounts
Be careful whenever you decide to use promotional discounts. You must be able to educate or give your customers a solid reason why you decide to put that percentage off of their bills. Why? It is because, in the buyer’s mind, the discounted item is not (actually) equally good compared to the item that is bought on its original price. This may sound ironic, but those guests who booked-in in resort properties with discounted rates are the ones who have negative comments and low scores on the resorts’ guest feedback forms because they think that they are subjected to receive a lesser quality of product or service.
Discounts are not always profit-barriers. They can still be profit-drivers but use discerningly. These are in fhe forms of off-peak discounts (lean seasons of the year) and volume discounts (the more you buy, the more affordable rates will be given to you).
Overhead is an ongoing expense that is being referred to as an operational cost. They do not really generate revenue but are essential in the business operation. This can be your rental fees, transportation, taxes, insurance, advertising fees, electricity, etc. Probe on these and check where you can cut cost. Do you need to trim down your marketing cost? Do you need to look for a virtual office space that can provide you lesser rental fees? Do you need to hire commission-based personnel instead of hiring a full-time sales staff? Check areas where you can maximize your savings without sacrificing the quality of your products and services.
5. Neck-to-Neck Competition
Being updated with industry and technology trends is very crucial nowadays. Product growth, diversity and even obsolescence becomes so rapid that they take the companies by the throat in their quest for survival in the market. Therefore, every organization should be on their toes all the time. You must learn to develop new product lines. Search for new customers. Be keen on the emerging markets and maximize what technology can offer in your favor.
One sad story in line with this is Friendster, founded by Jonathan Abrams in 2002. Back then, it was a first of its kind in the social media realms. Facebook came two years late as it has been operational by 2004. Did you know that it is even considered as the “grandfather of all social media networks”? Google even wanted to buy it for $30 million in 2003 but the Friendster Management declined. I remembered how excited I was reading my friends’ testimonials about me or that we share various photos online. What was irritating then was that the next time I checked on those photos, they were nowhere to be found as Friendster has shifted to a social online gaming community by 2011. I really wish they could have given the users an ample time to retrieve their shared photos. Unfortunately last 14th of June 2015 (yes, this year), they have officially suspended their services due to, “lack of engagement by the online community” as cited on their website. And yes, all their site users have transferred to Facebook.