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Vancouver Business Coach | The Problem With High Closing Rates

Vancouver Business Coach | The Problem With High Closing Rates

Entrepreneurs have a difficult job says Vancouver business coach. Of learning how to run a business. While running a business, but their own money on the line. Because of this, many businesses fail.
Vancouver Business Coach

In fact, many businesses then most people realize. Actually fail, in Canada every year. According to industry Canada. 50% of small businesses. Will fail within five years. And while most people will assume.

The reasons why they fail. Our based on a multitude of complex reasons. This industry Canada survey actually discovers. That most people fail. For three simple and avoidable reasons.

The first reason is that most businesses. In fact 42% of failed businesses. Will not succeed, because they cannot find enough customers. With the second most common reason, affecting a third of businesses.

Is that they will run out of money which will cause. Their business to fail within five years or less. While many business owners might mistakenly assume. That is long as they can find enough customers.

They will not run out of money. This is not the case. Especially if they have not priced their products. Or their services properly, and are charging. Far too low for what they should be charging.

When entrepreneurs start out, they either undervalue their products and services. Because there trying to compete. In the marketplace, by appealing. To their customers based on price alone.

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Or, because they do not know how to price their products adequately. Especially if they do not yet have overhead or a staff to account for. Therefore, businesses are pricing their products or services.

Based on the material costs. But that is not enough money. To pay their eventual overhead. To pay the staff that they will eventually need. And, pay themselves, trapping entrepreneurs.

In this scenario of being forced to work for free. Indefinitely, for the life of their business. If they discover they are charging too low. For their products and services. It can be very difficult once they have an established customer base.

To be able to increase the prices. They will typically offend, or upset. Their existing customers. Who do not want to pay more money. For a service or products. That they are used to paying a smaller price for.

And herein lies the problem. With trying to compete on price alone. If a business owner is attracting customers. Solely on the price. Once they can find. The price cheaper elsewhere, all of those customers will leave.

People who price shop have absolutely no loyalty. When price is their most important concern. However, Vancouver business coach says the good news is. Most customers do not shop solely on price.

While price is an important consideration. It is not the most important consideration. Whether people are buying groceries, clothing or cars. By appealing to a certain type of customer. On different values.

Entrepreneurs can attract those customers. Who are willing to pay a little bit more money. To get that need met. Or, to have that value in the purchase that they make says Vancouver business coach.

Vancouver Business Coach | The Problem With Having High Closing Rates

While a high closing rate says Vancouver business coach. Is not necessarily a problem. It should cause a business owner. To look at their cost of goods sold. And ensure that they are charging their market value for them.

When businesses are new, entrepreneurs might see. The fact that they have a lot of customers as a positive sign. They may not even look at their prices. Or why they have so many sales.

A seasoned business owner according to Vancouver business coach. Will realize that if they have. A closing rate of more than 80%. That typically is an indication. That their pricing is way off.

Not everybody is going to be an ideal customer for every business. But if that seems to be the case. Typically, it is because the products and services. Are being undervalued. Business owners have to understand.

That there prices must cover. Not only the material costs. Of manufacturing the products and services that they sell. But that there prices must cover any and all overhead. Such as rent and utilities in a commercial location.

If they do not yet have commercial location. Or a staff for example. They still have to take into consideration. They will eventually need to pay for these expenses. And they cannot raise the prices.

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Of their products and services. When that time comes. Because they will lose the customers. That are used to paying. The lesser amount for the same products and services that they are selling.

Therefore, it is important that they sit down with Vancouver business coach early on in their business. In order to ensure that they are pricing. Their products and services properly. So that they can make money.

In their business even as they grow. However, the second problem crops up. When entrepreneurs do not believe. That they can charge more money. For their products and services.

Either because they do not believe in their product or service. Or because they believe the only way. They can compete with their competition. Who has been around for longer. Is to be the cheapest option.

However, this is also not true. And by being the lowest price. Businesses are only going to attract. People who are willing to go. To any business that sells that product for less money.

And it is much better to attract clients. Based on a certain value. That is important to those customers. How they can figure out what value that is. Is by looking at what they can and do better.

Then their competition. Perhaps they manufacture their products. With unique materials. Or, the highest quality materials. Perhaps they are more convenient, or help their customers save time.

It could be that they have a unique feature. Or offer the best customer service than any of the competition. When they compete on values. Not only will they find customers. But those customers will be willing to pay more money as well.