Don't forget the little things...

September 11, 2017

In 1750, old Mr. Lowndes, the famous Secretary of the Treasury, used to say; "Take care of the pence, and the pounds will take care of themselves..."


Does that mean you have to be super-tight?


Well, no, but think of this, as your business gets bigger, the little things add up.


When you're a new small business, giving away the odd thing here and there, or doing something for free, isn't such a big deal. But as your business grows, the little things add up.


For example, let's say you have a coffee shop. You are new and small and each day, let's say, you have four customers want a shot of syrup. That costs you 25p per shot. You decide not to charge as a gesture of goodwill / customer retention whatever. So that costs you about £1 a day.


That's ok. Around £300 a year for customer good will is fine.


But as you grow, those four a day become eight, become 12, 25, 30.....


So now you're busy. Every day you give away 30 shots of syrup. That costs you 25p x 30 shots = £7.50 a day. Not much as you're busier now.


But that is now costing you £2,347.50 a year.


Nice holiday there. Or a new piece of equipment. 


So think about the little things. Either charge from the start, or at least cost it into your sales price. If you don't charge at first, then you start charging, your customers will see it as a price hike and you might even lose those customers. But price it in from the start, or charge from day one and customers don't see it as a price hike. 


Or a service. Say you have to do a little job for your customer, which takes you 10 minutes to do. That's ok, if you have to do one or two a week. But what about when your business grows and you're doing 20 or 30? To the client, being charged for 10 minutes seems really tight; but if you're doing 20 a week, that is roughly three-and-a-half hours a week. A whole morning for free. But not just your time; it's time you could have been earning on other work, so in a way it's twice as bad. When you get to 50 a week, that's a whole day gone for nothing. So do you employ someone to do it? That free work now actually costs you to do it for free! 


I'm not saying you have to charge for everything and can't give anything away for free, all I'm saying is think ahead. Remember to take account of the little things. Charge from day one so the client doesn't see it as a price hike later, or at least be aware of it and price it into your over-all charges. 


It's only when you're growing do you suddenly realise, the little things add up.






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