What do you do when you can't keep up with the demand for services and can't afford to hire an employee?
My future son-in-law started his own small engine repair business two years ago. He immediately learned that the demand for these services was incredible and time-consuming. Even with nonstop work from 6 a.m. to 10 p.m., he can't keep up. Yet he can't afford to hire someone to help. He is about to give up the business because paying bills is becoming increasingly difficult.In this case, you can gently tell your future son-in-law you were right, and that by raising prices he will be able to do half the work at double the price.
I suggested he charge more, but he says that to keep his clients and compete with larger businesses, he needs to keep his prices below his competitors'. Getting a loan is also a problem because his collateral is limilted. What else can he do?
Even if he loses some customers on price (which he will) . . . he will make it up in margins--and, ultimately, profit is the key to a successful business.
The second key, once prices are raised, is to keep happy customers coming back That's because the key to a viable business is repeat business. There's no sense working hard and devoting hours to what is basically a low-paying job--even if it is his "own" business.
That said, having his own business means he is in control, and he has the power to increase his profits and decrease his time spent working--two results that can be measured by running the business at higher prices, rather than having the lower-priced business run him.
All the best.
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