8 Big small businesses make

Oct. 26, 2010 - PRLog -- Although a lot of these big and sneaky mistakes seem aimed more at service type businesses, they really do fit the bill for almost any type of industry. I've done my best with the listings below to give examples to prove it.
Underestimating Project/Service Time- This is a big one and it concerns service companies along with companies that sell a product. This is a service company's bread and butter. If you do not estimate your time to perform each and every service in your repertoire, you will get burned and there is little you can do about it but bite the bullet and learn from it. The best method to estimate time is to do it once yourself or watch your best staff member do the chore and then throw in a little fudge factor on top of it. For product businesses, time becomes an issue with logistics so be conscious!

Not Knowing YOUR Company Numbers/Incorrectly Setting Prices- Notice I emphasized the word your. It's a common mistake to make use of a competitor's as your pricing gauge without actually knowing why they use those numbers. Consider the nightmare you will get yourself into if you take a competitor's price, cut it by 10% and then start selling. What if the competition has a bad pricing structure and is scarcely making money or even losing money?!?! What if your costs are more than theirs?!?! You can utilize competitor as a starting position but you cannot base your whole strategy on it.

Different industries have their own variables as far as costs go and you have to be mindful of them for your job or product pricing. What you pay for an item you are going to sell is not the only cost to have in your head when you're pricing products. How much your labor and materials cost for a service is just a piece of an hourly rate. Staff members cost more than simply salary and not all employee is part of your labor cost. Every company has insurance to pay for. There are tons of overhead expenditures that need to be associated with your price. Oh, incidentally, the large one that people often forget about in their price is the quality factor. What you include as regular facilities or standard product features in addition to job site etiquette or in outlet service or warranties all need to enter your pricing. I'll get to more on why in the next segment.
These are some of the mistakes that you need to avoid.