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Simonson, post: 267649, member: 116281 wrote:
It sounds like you have a foundation, however, I would suggest charging what might be considered a ‘competitive’ rate until you have enough clients that you can slowly increase the price.

I have seen this approach fail all to often, in other words a rate which is below the average to bring in customers.

The problems I see are:

  • you really only get the poor quality clients, the good quality clients are prepared to pay more. Business’s can’t operate with poor quality clients.
  • The business owner is not making a viable income and goes under before they can up there prices.
  • You cant just up your prices overnight, because customers aren’t stupid, one day you quote them X dollars to get them in the door, then a few months you increase it to X dollars times 10, and they are out of there.
  • you are just perpetuating the damage to the specific industry where you try to use this approach.

To many small business’s start under cutting, and they are doing damage to their own business and to the service sector as a whole.

I have seen others who have sold of multiple business’s, they build them up by under pricing them, build up a client base, sell them off, then the new owner is left stranded with useless clients, but having handed over to many dollars for an under performing business, which with a good accountant can be made look good on the books.