I was working with a small manufacturing company recently. One of my first questions was about 'ex factory costs' ... trying to find out how much it cost them to make their product.
They didn't know.
"So how do you set your selling price", I asked.
"We charge what the market will bear."
"So what is your margin."
They didn't know ... but they did know they were losing money .. .which is why they had asked me to take a look.
This is not, unfortunately, out of the ordinary. Many small businesses are interested in the product or service not the process of getting it to market.
So think about your business ... and the bits you are interested in ... and the bits you are not; the bits you are good at ... and the bits you are not. Then find a way of filling those gaps.
They didn't know.
"So how do you set your selling price", I asked.
"We charge what the market will bear."
"So what is your margin."
They didn't know ... but they did know they were losing money .. .which is why they had asked me to take a look.
This is not, unfortunately, out of the ordinary. Many small businesses are interested in the product or service not the process of getting it to market.
So think about your business ... and the bits you are interested in ... and the bits you are not; the bits you are good at ... and the bits you are not. Then find a way of filling those gaps.
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