Pricing Your Products

January 21, 2015

 

Product assortment, store location, and brand name can justify your price

It is quite interesting how shops and stores seem to have different prices despite the similarities of products being sold. And more interesting is the fact that in most instances, I have noticed that every store has customers! I believe one reason is that there are factors that make each one of them stand out, and this is also the reason why some shops who sell with a higher price still gets a lot of customers!

Here are three pricing points I have learned:

PRODUCT VARIATION. Stores that provide a massive assortment of product usually sell low to average because they have the ability to attract a lot of customers, and cater for their various preferences.

LOCATION. Most shops that are immediately within eyesight from entrances are the ones that will catch your interest to buy immediately, but some of them actually price higher than others. This is because they have a “prime” location, as compared to those whose stalls are farther than them. It’s not a problem for them anyway, because improperly located stores will absolutely have seldom to no visits from customers at all.

BRAND NAME. Other stores that have their own outlet, logo, and name in prime locations would almost always sell higher than the local stores found along the streets, and this is because of their brand. They have their own business name and establishment which can justify their pricing.

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There is Money in Dirty Laundry

March 28, 2011

by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) from the Manila Bulletin

Do you want a simple business that has a growing demand and high profit potential? A laundry shop may be your dream business. Reliable “labanderas” are getting harder to find and busy people often have no more time to do their own laundry.

Below is short list of the steps you need to take to launch your venture:

1. Consider your financial resources. You will need a minimum of around Php 200,000 to fund your own laundry. You may opt to get a franchise to lessen the risk but this will mean less control over your business and additional overhead in the form of royalties and other expenses. Still a franchise is a good option because of marketing and operational advantages among others.

2. Determine your target market and find the ideal location. We suggest those near condos and dorms where there is a large demand for laundry services.

3. Check if the water supply is adequate and fit to use. There are places where the water is insufficient or has too many minerals for laundry use.

4. Register your business name once you already have a location. If it is a sole proprietor, go to DTI and if it is a corporation or partnership, you must register with the SEC. Then get a barangay clearance before proceeding to city hall and finally to the BIR.

5. Acquire and install equipments. For a start up it is recommended that get brand new equipments. Second hand machines may break down often and cause more expenses, especially if you factor in lost sales.

6. Hire and train new employees. Check their back ground carefully and have them submit a current NBI clearance. Make sure they are well trained not only on how to operate the machines and clean laundry but also on basic customer service.

7. A return on investment of one year or even less is very possible if you have a good location and you know how to run your laundry well.

Where do you learn to run a laundry profitably? BusinessCoach Inc., a leading business seminar provider, offers a highly practical seminar on how to start and operate a laundry. Learn the trade secrets from the experience of an actual laundry owner before risking your hard earned capital.

Click here to view details of the training program: How to Start a Laundry Shop Business >>

(All rights reserved. Copyright by Manila Bulletin and Ruben P. Anlacan, Jr. May not be reproduced or copied without express written permission of the copyright holders.)


Jump Start Your Career: Manage Your Time Effectively

March 22, 2011

Business Coach Column by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) from the Manila Bulletin

Whether you are climbing the corporate ladder or are an ambitious entrepreneur, the way you manage your time is the key to your success. If you keep missing deadline, are late in submitting reports, feel overly tired, or simply cannot cope with work, there may be a chance that you fail to manage your time correctly.

Are you like this?

• You believe you could not get so many things done if it were not for all the interruptions.

• You keep blaming others but yourself for all your unfinished tasks.

If you feel you are buried with so many responsibilities, it is time you learn to use your time effectively. Try some of these tips:

Understand how you spend your time.

Keep a diary of how you spend your time in fifteen minute segments. At the end of the day, assess if what you did per segment is the most productive. Do this for one week so you can have a better idea of your work routine.

Make a ‘to-do’ list.

Prioritize or highlight tasks that need quick attention. Make a timeline as to when each task must be addressed. Consider not only the importance but also the urgency of the job. Make sure you finish your work from the order of the most prioritized to the lowest priority. Post your to-do-list on a conspicuous place, so you will always be reminded on what you have to do.

Delay other activities unless your priorities are done.

You could waste your entire day doing activities that have little impact. I know of one entrepreneur who spent most of her time in the warehouse arranging stocks when her company’s sales were fast declining. She neglected to address the more critical problem, and soon her company became bankrupt.

Have your receptionist screen calls.

Give a list of callers who you have identified as “must be replied to quickly,” “call may be returned within the day,” and “may be asked to just leave a message.” It helps if you buy a portable phone which you can use wherever you are in the office. You may also buy a speaker phone, as this allows you to attend to your calls while you are doing something else.

Return calls at a certain time.

Be prepared. If it is a sales call, make sure you have your product information and price list on hand. Keep calls short and direct.

Clear clutter from your desk.

Unless this is what it takes to keep your boss from dumping more work on your table, put your paperwork in their proper places as soon as you process them. It wastes so much time if you have to look for missing papers.

Learn to delegate.

This is the ultimate time saver, and if you are a manager, you must always be on the lookout for tasks that may be delegated. This is a double-edged sword, however, and one must be prepared to handle the risks if a subordinate is unable to perform.

Have a schedule for opening emails.

Check no more than twice a day: in the morning after you have taken care of the more urgent maters, and in the afternoon, around one hour before leaving so that you have enough time to properly compose – and review – a reply. Answer what needs to be answered, and trash emails that you think are junk. Do not leave email unanswered as you will surely waste time getting back to them later. Answer and be done with it. Do not procrastinate.

Identify time wasters.

Avoid pursuing prospects you probably cannot sell to, or paying too much attention to low-yield prospects. Internally, you can check if a traditional meeting is still relevant or it has outlived its usefulness.

Learn to say “No.”

If others delegate more tasks to you, politely reject the proposition. You may state that you are currently working on a project, and will probably be free on a certain date.

Use your free time wisely.

Reduce your time catching up on gossip. You may read personal email during coffee breaks or read trade books or magazines related to your work.

Invest time in taking care of your health.

Nothing can consume as much time and create as many expenses as a major illness. Do not skip your scheduled checkups. Exercise regularly; it not only will make you healthier but it will also give you additional energy to do more work.

Making effective use of your time is not easy at first. Lifelong habits are hard to break and sometimes everything seems urgent. Nevertheless, as you keep on sharpening your time management skills, eventually you will overcome the inertia. With more time on your hands, not only will you succeed in your career, but you can also spend more quality time with your family.

(All rights reserved. Copyright by Manila Bulletin and Ruben P. Anlacan, Jr. May not be reproduced or copied without express written permission of the copyright holders.)



60 Years Old… Ready, Get Set… Retire?

March 1, 2011

Business Coach Column by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) from the Manila Bulletin

To retire or not to retire, that is the question

Some business consultants and trainers of Business Coach, Inc. are over 60 years old. Whenever, they are asked if they are ready to retire, they will laugh and say “Of course not. Malakas pa kami sa kalabaw (We’re stronger than carabaos).”

I have met a lot who are in top level or management positions and whenever someone brings up the topic on retirement, they often shudder. Just the mere mention of the word makes their mood shift to ‘down’.

They have acquired many skills and accumulated much knowledge, and are equipped with sufficient work training, yet those nearing their 60 years of age feel more than agitated about the mere thought of retirement. This is because of the belief that being 60 years of age means being “old and tired”. However, this confuses me. How can they be tired of doing what they can do best?

In other countries, they do not discriminate by virtue of age. When my wife and I went to Hong Kong, we were surprised that the hotel concierge staff who welcomed us was a senior citizen. We were even more astonished when we went to a McDonald’s restaurant because the service crew and the cashiers were around 60 years or older. Not only that, my wife has a 67 years old aunt in Canada who works as a banquet staff in a hotel.

Here in the Philippines is a different story. The lolos and the lolas just have to retire, simply because they have to. The law mandates or allows it.

Most anticipate retirement negatively. If only they can postpone it, they would. However, as this is inevitable, the only thing to do is to plan. Retirement will only be pleasant if you are prepared emotionally and financially.

• Prepare early, if possible at least 10 years before retirement. Retirement represents a great change in your life. If you are unprepared, this will weigh you down emotionally, physically, and financially.

• Approach retirement with a positive attitude. Remember, retirement will allow you to be free from your strict routine. You will have plenty of time to read. You may have more time to visit your family and friends. Relax and simply enjoy life.

• Be strict with your finances. You need to save for the future. Track your expenses, and make sure you buy only what you need. It would also help if you pay all your outstanding loans so they will not burden you in the future.

• Keep yourself healthy. You would not want to spend your retirement money paying your hospital bills. Restructure your lifestyle and have regular checkups. You need not enrol in an expensive gym if it will not fit in your budget. Brisk walking, gardening, dancing, and doing household chores can help you lose calories at no cost.

• Get a health plan. Medical treatment is expensive and you must have a plan to cope with its escalating costs. Look around for a reliable and affordable health management company.

• Choose a hobby. However, when pursuing a hobby, make sure that it is not too costly. There are certain hobbies that can even help you earn money. You may learn how to bake a cake, maintain income generating blogs, breed dogs, or grow fruit bearing trees.

• Do volunteer works. You may participate in any neighborhood or church program. Remember, this is the time to give back to the community. Reach out to the less fortunate.

• Seek a part-time job. This will not only help you with your finances, but also help you keep in touch with the industry and keep your skills up-to-date. You may also apply as a consultant or trainer.

• Start your own business. After retirement would be the perfect time to start your own business. Perhaps, your kids have already finished college. You may have just received your retirement pay, and if you feel you are not yet ready to retire, then choose to start a business. Just, remember to invest your money wisely.

• Follow your passion. Now is the best time to pursue what you really would love to do. If you like music it is never too late to start. George Yang, the tycoon who built Mc Donald’s here, discovered his talent for classical singing at a late age. He became so skilled in his craft that he was able to stage several successful concerts.

There are an infinite number of ways to make great use of your golden years. With lesser obligations and more time you now have the freedom and wisdom to seize opportunities previously beyond reach. Instead of withdrawing from the world you can immerse yourself in a wider spectrum of activities.

In our company, I have found out that working with people over 60 years of age has been very fruitful. Their vast experience and knowledge make them excellent mentors and trainers. Indeed, I would agree that “kalabaw lang ang tumatanda (only carabaos age).” They may have retired from their job, but not from their lives.

(All rights reserved. Copyright by Manila Bulletin and Ruben P. Anlacan, Jr. May not be reproduced or copied without express written permission of the copyright holders.)


The Vital Role of the Business Model

February 22, 2011

Business Coach Column by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) from the Manila Bulletin

In starting a business, the right practice is to come up with a business model before writing your business plan. A business model focuses only on the basic ideas and process of how you will be earning your profit. You must first have a business model, at least, in your mind, before you can write a coherent business plan.

Having a business model will enable you to discern the strengths and weaknesses of certain aspects of the business concept before you spend too much time or capital. You can have an overview of the heart of the business without the peripheral parts that are not as significant. A business model is not just a small business plan. It is an initial test of viability.

Although there are many business models, they are far fewer than business plans since there is an unlimited number of business plans you can make from a single business model. Business models are also less detailed and more concise than the usual business plan. A good analogy is that business models are like story lines or plots while business plans are like movie scripts.

The truth is that business models, unless you are in the high-tech industry, are usually generic and it is up to the entrepreneur to find what component in the business model they can have or can create a competitive advantage. If after making a business model, you find no significant roadblocks then you can proceed to drawing up a business plan.

To better appreciate the utility of finding the ideal business model, I hereby, describe some business models that are currently popular and profitable.

A fine example of a business model is franchising. In this model, some franchisors offers a turnkey system, brand name recognition, economies of scale, and proven profitability, among other things in return for royalties and other income from franchisees.

The razor and blades business model practically gives away razors to make money on the blades that must be bought later on. You rely on subsequent sale of supplies for your profit. Prime examples of this are the desktop printer companies who offer printers at an extremely low price and then earn their true profit on the ink they sell.

A very promising type of business model is the “servitization of products”. This is due to the increased role of service in adding value to product offerings. Services packaged along with your products will increase revenues. Nowadays computer companies rarely make good profits on the hardware they sell. The bulk of their income comes from the services like maintenance, software, financing, consultancy, business process outsourcing, etc.

There are many more business models and new ones are being invented but whatever model you select, you must know how to make it work. Here are some tips to make your business model a useful tool in your planning:

Have a strong customer value. There must be a compelling advantage in choosing your product or service over their current vendor. Having only a slight edge may not be sufficient to change established habits and relationships.

Obtain the current costs of your major inputs. Get the wholesale costs of the items or inputs that will go into the product or service you will be selling.

Establish the likely selling price of your product or service. Research the prevailing market prices of similar products or service. If the item or service is truly unique then conduct market research to have a realistic projection. This data along with the costs will help you forecast your margins.

Have a business model specific enough to be useful. This requires some analysis as crucial differences may not be readily apparent. A traditional drugstore is very different from a generics drugstore not only in the product assortment they carry but also in the marketing. Therefore, it will be necessary to specify the type.

Consider disruptive technologies. For example, if your business model is a clothing store, then consider how much internet based sellers will erode potential sales.

Know the costs of acquiring a customer. Find out your costs of obtaining sales. This is one of the most important factors to consider as often, too much capital is spent for insufficient sales.

Study if your business model is sustainable. See if demand for your product is probably not just a fad. Consider too if your key selling point is not too easily copied.

Coming up with a good business model is the first step in planning a business. It is also the most critical. Here you must expend the most creative effort as this is where the vital strategic decisions are decided. When you have a great business model you have built a solid foundation for a profitable business.

(All rights reserved. Copyright by Manila Bulletin and Ruben P. Anlacan, Jr. May not be reproduced or copied without express written permission of the copyright holders.)


Evaluating a Job Offer

February 15, 2011

Business Coach Column by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) from the Manila Bulletin

Congratulations to the new graduates! Your parents may be so very proud of you. After so many years of struggling with homework and graded recitations, you have finally made it.

For sure, your next mission is to hunt for a job. After the delight of the graduation march, we welcome you to the struggles of looking for your first job. Being the proactive person that you are, you may be holding this very newspaper because you are actively seeking employment.

You may be dying to get a job, but I advise you to seriously evaluate a job offer before accepting it. I am not saying that you should be picky, but you do want to be assured that the job you are getting is in consonance with your skills and capabilities.

Here are guide questions that would help you evaluate a job offer:

What are the job’s duties and responsibilities?

Before accepting the job, you should have a clear understanding of what you are going to do. You must have knowledge of what you will be doing, so you can see if you will be able to utilize the talents you have acquired in college.

What is the pay structure?

Know the salary you will be getting before signing any contract. Note that it should be at least at par with what the industry is paying for the same position elsewhere. Of course, it helps also if there are extras such as incentives or bonuses. Some companies also provide perks such as unlimited coffee, birthday treats, flexitime, health plans, etc. This may not really cost much, but it shows how much the company values its employees.

Do you feel a sense of pride in belonging with the company?

You may have found out that the company is engaging in illegal activities, or is dishonest in its dealings. Ask yourself if you can stomach this, or if you would rather seek employment elsewhere.

Is the company stable?

Consider if the firm will still be around for at least as long as you plan on working there.

How credible is your job title?

Some positions have over inflated titles to attract applicants. Jobs with titles like “management trainee” should be probed so that you can see if your career path at that company will actually lead to a management position.

What are the working hours?

Find out if the company requires frequent overtime, or if the job necessitates that you work on weekends and holidays. There are also some jobs that require working at night. There is nothing wrong with this, but knowing this will prepare you for skipping family gatherings and weekend getaways in order to work.

Would the job require you to travel a lot?

This may be either good or bad, depending on your personality. If you love to travel, go ahead and grab the opportunity. However, if you dislike travelling, you may consider other job options.

Will there be a written contract?

Note that if you are given merely a verbal agreement, there is a high chance that some promises made to entice you to work at that company may be “forgotten”.

What are the company’s restrictions?

Know the company policies on tardiness and absences. Evaluate the contract. Some contracts prohibit employees who leave a company from working for a competitor for a specified period of time. This is legal and enforceable. However, find out how long this takes effect. It should be for a limited period of time… not forever.

Does the company prepare people for promotion?

You must know if it will be a dead end position. Try to find out if the company offers training, as this will groom you for the next level.

Can you abide with odd company policies?

There are some bosses who will require you to wear costumes during Halloween and Christmas. Before accepting the job, ask yourself if this is fine with you.

Also, there are some companies that are so strict, that they will monitor all your actions through a closed circuit television (CCTV), while some will want you to undergo yearly drug tests.

Does the company follow labor laws and regulations?

Try to find out if the company remits SSS, Philhealth, HDMF, and tax dues. The company must also give overtime pay, night differential, and service incentive leaves as mandated.

It is difficult to find a job, and you may be very tempted to accept the first company that is willing to hire you. It might be better to have a not-so-ideal job rather than being unemployed. Nevertheless, be prepared to analyze the offers in case you have options.

(All rights reserved. Copyright by Manila Bulletin and Ruben P. Anlacan, Jr. May not be reproduced or copied without express written permission of the copyright holders.)