Sunday, April 3, 2011

There’s no shame in making a profit

Throughout most of history businesses and profits have been thought of as distasteful or an ugly necessity. There are echoes of this in our education system, in politics and in the everyday media.

Most of us work in or for business one way or the other. When you go to buy a new washing machine you accept that the miners had to be paid for the raw materials, the foundry was paid to make the steel, the manufacturer was paid for its R&D, marketing and manufacturing costs, the transport companies were paid for the costs of their ships and trucks plus labour, and the retailer was paid to keep inventory and sales staff in a probably costly retail outlet.

You know all of this and it seems acceptable. It seems acceptable because you recognise the work required of others and that the price benchmarks well against your other choices.

However, when you first start out it can still feel embarrassing to make money from your efforts, and you may also feel the need to buy your sales by charging only cost, not paying yourself a salary, etc. so you can undercut your competitors.

Try benchmarking your price against competitors pricing and offering. Use that as your price and if you are still ashamed your profits give it to a charity.

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