Pricing Tips That Work

The right price for your product or service will make all the difference between using red ink or black ink on your accounting books. Unless you have a smart pricing strategy all your hard work of getting your business up and running could collapse.

Here are some tips for how you should approach your own pricing methods:

Not All Prices Should Be the Same

A research study conducted at Yale University found that when two of the same type of products were priced exactly the same customers shied away from making a purchase as opposed to when the items were priced differently. This doesn't mean you should mix up your prices on the same products. Just understand the mind of the consumer. Perhaps it's more about changing the pricing with an item that has a noticeable variant like size or design. This idea also comes into play when stacking your product line up against competitors. You should always keep an eye on competitive prices.

Try Price Anchoring

Price anchoring taps into our tendency to exclusively factor the first price we see when it is set against a second higher price. Restaurants will use this tip when they are selling expensive items together. The $50 lobster looks pretty good compared to the $75 Kobe steak. The result? More lobsters are sold. The basic premise is that you're creating a sense of value for your customer. In other words, give them something to compare to.

To Make a Sale, Decrease the Sticker Shock

What sounds more like a bargain: a subscription for wine of the month club at $50 a month or $600 a year? They are actually the same price, but the consumer thinks the monthly cost is more affordable. This is the approach you should take in your sales campaign. A fee attached to a product should be a "small fee." Bundle products together into a single "great bargain package." Appeal to the grander solution of a problem.  

Use the Number 9

The number 9 has become so ingrained on the shopper's mind that it actually holds appeal. You can reduce a product from $80 to $60 but it might be stronger to go down to $59. It works every time!

Test Your Prices

There is a trial and error when it comes to finding the sweet spot of pricing. You might have to experiment with different price points to see what works best for your product. If you start a new campaign with a lower price point, make sure you get your marketing up to speed so all your customers will know. 

Should Your Accounting Go Into the Cloud?

Are you up in the cloud yet? We're not talking about daydreaming your afternoon away, but instead about cloud data storage. The simple way of thinking about cloud data storage would be like having an extra attic added onto your home that you can go up to from time to time to add and takeaway stuff. Best of all this "attic" doesn't clutter up the rest of your home.

Cloud storage allows you to park huge amounts of data and software programs, which can free up valuable storage space on your computer. This is vital for a company that is dealing with massive amounts of accounting data. There is still a kind of hesitancy with some companies who feel like they are "letting go" of their data. Should your accounting go into the cloud? Consider these potential benefits of having your accounting software delivered by way of the cloud:

Real Time Updates

If you have an accounting program on your computer, you'll be notified when an update is available and then you'll have to allow your computer to install that update. Often this requires you to reboot your computer. Do you have time for all of that? Up in the cloud, any programming updates are installed automatically. You'll only notice when you see the new features added to your software.

Ability to Expand

Cloud storage is 100% scalable. This means you can add large amounts of extra data at very little extra cost. The alternative would be expanding your memory in your computer. You can also take away data with the same ease and pay for just what you use.

Instant Access

A cloud-based accounting program grants you instant access from applicable devices anywhere there is an internet connection. This means you can work on a plane, at the beach or your favorite java joint.

Ease of Use

Stepping into the cloud is easy to use. You'll also be getting the added bonus of your software provider managing storage space, security and all your backups without you having to stress out over that. In other words, peace of mind knowing that your accounting needs are being met.

Affordable Options

The cloud accounting software you'll be utilizing will be running as a service. Translation: you'll pay a small subscription fee as opposed to a huge purchase price. You also won't have to worry about paying for upgrades when they are available. All for one low price. 

It's The Wave of The Future 

Cloud technology is improving by leaps and bounds every day. As a user you'll be benefiting from all of those upgrades as they happen. It would be like having the latest iPhone delivered to you every time there is a change as opposed to standing in line for hours at the Apple Store.   

How to Manage Complex Projects Easily

Not every business project for your company is going to be a "walk in the park."

There is going to come a time when you need to tackle a complex project. Whether that involves shipping and selling in multiple countries or starting up an assembly line to build a product in volume, you'll be dealing with many issues involving several departments.

However, don’t despair as there is a way to manage complex projects easily. Here's how:

Step 1: Set Your Goals

What is the goal of this complex project? The answer to that question could be something as simple as "build a new website" or "increase traffic to existing website." Within that goal should be some tangible items like due dates, sale expectations and/or specific benchmark numbers. Once you've established clear objectives then you know what you're heading towards. The challenge is not to deviate from that path no matter how "big" things may become.

Step 2: Keep the Lines of Communication Open

Once you've shared your goals with the team you should open the floor for discussion. Here is where you'll learn if and when your goals are actually obtainable. There is nothing wrong with pushing your staff to do their best but that doesn't mean becoming unrealistic. Although it's a great goal to earn a million dollars by Friday, it might not be practical. This is the time to brainstorm out idea to help move things along. If your staff knows they can share concerns and ideas then your project will only be strengthened.

Step 3: Set a Budget

What is this project going to cost? That's an extremely important factor to consider. You should have a budget set for the project that everyone can fall in line with. Don't hesitate to pad that budget with a contingency fund "just in case."

Step 4: Set an Action Plan

You already have an overall business plan for your company. Now drill down and apply those same principles to this new project. The project plan should be worked out enough that you could hand it off to anyone in your company and they would be able to follow it without asking questions.

Step 5: Encourage Out of the Box Thinking

Sometimes a project becomes complex because we don't know any other way to do things. When you get stuck on implementing a specific item it might be time to step out of the proverbial box for some original thinking. This type of creative problem solving has been a huge asset to many businesses.

Step 6: Set Up Tests

No matter what you're working on, you can't go from "start" to "finish" without testing the end result. For instance, if you're building a new website with an ecommerce component then you should definitely build in a testing phase to work out all the kinks in the system. Only then can you call a project truly ready to launch.

How to Measure Customer Satisfaction

How happy are your customers? If you don't know the answer to that question then it might be time for some additional research. The best way to expand your company is to make sure you're giving your customers what they want.

The only way to find that out is to gauge their level of satisfaction. Professor Scott Smith, the co-founder of Qualtrics, has come up with a simple and direct approach to determining customer satisfaction.

Here are the four fundamental measurements he suggests you apply to your business:

Perceived Quality

You can ask your customers to fill out a survey card and leave it at your store or answer a quick online survey. Either way, the first question to ask is a variation on the theme of "How was your experience with our company?" Right off the bat you're going to know how the customer feels especially if you ascribe some sort of rating like a scale of 1 to 10 or adverbs like "great, good, so-so or bad." This will become your baseline for customer satisfaction.

The Loyalty Measurement

Every business depends on loyal customers coming back to make additional purchases. The hope is that those customers will take the next step and recommend that company to someone else. With the loyalty measurement you'll be asking, "Would you recommend our company?" It's a yes or no question that you can break down to degrees such as "very likely, somewhat likely, etc." It's a terrific snapshot to judge how many referrals your customers can bring in. That might inspire you to take it a step further with some sort of incentive program.

Attribution Satisfaction

These are the survey questions you'll be asking that get into the specific of a particular product. In other words, you want to find out what attracted a customer to that product. Was it the price? Availability of sizes? Ease of shipping? Colour? There could be many factors that went into the purchase. Finding those out will help support future product launches and sales campaigns.

Intention to Repurchase

There are some products that are geared to be bought only once while others require frequent repurchasing. Either way, you want to know if your customer was happy enough with your business that they would do it all over again. A customer with a positive shopping experience is more likely to buy that product again, perhaps as a gift. At the very least they'll be recommending your company to others.

Take note that all the positive information you gather in these types of surveys can be used in your own marketing campaigns. If you can have a 100% customer approval rating why wouldn't you share that with the world?

Of course, you won't know any of this unless you ask!

Crazy Business Ideas That Worked

There is no telling where the inspiration for the next great idea will come from. You could dream up a new invention or think about a perfect solution for a problem in your life. Wherever that idea comes from don't be discouraged if anyone thinks it’s crazy. All it takes is that one great crazy idea to launch a career and fill up a bank account.

Here are some examples of crazy ideas that turned into serious cash:

The Million-Dollar Homepage

How many times have you thought, "if only I had a nickel for every (fill in the blank)?" Alex Tew took that concept and turned it into an advertising bonanza. He set up a webpage which was a kind of virtual click-through billboard. There were 1,000,000 available pixels on the page that he was selling for $1 a pop. It took him just over a year to reach his target goal. The billboard is still up and drawing new visitors every day. Not bad for a crazy idea.

Doggles

If there is one thing folks love to do it is pamper their pets. When Roni Di Lullo noticed her dog squinting up at bright sunlight she thought he might benefit from the same item she used: sunglasses. All it took was a little product development experimentation and Doggles were born. So was another million-dollar business.

Pooperscooper

Speaking of dogs, there is always a daily cleanup that occurs when you've got a pup around the house. Well, it's supposed to be a daily cleanup. In some cases, folks let their dogs do their "business" in the backyard and hope that it will somehow disappear. It won't. That's good news for Matthew Osborn who created a company that offers full service dog poo removal services. That local homegrown business turned into a national franchise which is now the largest pet waste removal company in America.

Lasermonks

Throughout history, monks have been known for their studious nature. It seems as though every monastery has their own cottage industry used to raise money for the poor and for the upkeep of the brothers. Back in 2002, Father Bernard McCoy was shopping around for cheap printer ink and decided to make his own from recycled cartridges. Thus it was that Lasermonks was born. From first year earnings of $2,000 the company has gone on to make over $4 million annually. Not bad for some reused ink.

So what is your crazy idea? Maybe it's not that crazy after all.  

Crowdfunding In Canada - Tips For Raising Money

Looking for some crowdfunding investments to get your business started or expanded? This type of investing has become a viable way to collect capital that can be put to good use. As with everything in life, there is no such thing as a free ride. Here are some tips to consider when raising money through crowdfunding:

Tip #1: Show What You're Creating

Since your crowdfunding campaign will no doubt be launched online, there is no excuse not to include photos and/or videos of exactly what you plan to sell, make or provide. Even if you've created the next great "widget", make sure that you have a prototype that you can show off. Make sure your ideas are protected before you share them with your potential investors. When those money folks can see something tangible, they'll be more likely to part with their money.

Tip #2: Research Your Platform

Among crowdfunding sites, Kickstarter and Indiegogo are the most popular. These are the ones that most folks will go to first because they seem to be getting all the good press. Here in Canada, Kickstarter is getting ready to lower restrictions for more participation. Also check out Crowdfunder, RocketHub and Quirky. Spend time getting to know these sites and the community they attract. This research should help you find the right fit for your campaign.

Tip #3: Copy From Success

There are many crowdfunding success stories out there. Guess what? You can borrow from them when it comes to building your page. See what those campaigns used to attract investors. You can learn a lot from those investor comments. Was it the video that made the difference? Was it the pitch? Whatever worked, try to adapt it for your cause.

Tip #4: Build Up Some Sweet Perks

The benefit of crowdfunding is that there is no obligation for a return on that investment beyond the perks. To attract investors, you'll want to offer some goodies. The recent wildly successful "Veronica Mars Movie" Kickstarter campaign offered walk on parts in the movie, autographed scripts and interactions with the stars. All of these perks came at certain levels of investment. In other words, save the good stuff for the big bucks. Special note: Start the perks at the $25 level. This is the most common donation and a good way to get things fired up.

Tip #5: Work Outside the Crowdfunding

Just because you set up a page on Kickstarter doesn't mean your work is done. You need to get the word out about what you're trying to accomplish. There are many folks who stop by crowdfunding sites to see what’s new, however, that's not going to be enough for your needs. Think of your social media outreach. You should be using Twitter, Facebook and any other media outlet you can tap into to spread the news about your campaign.

Make it fun and watch the money roll in! 

Things to Consider When Incorporating Your Business

Incorporating your business in Canada can provide you with a level of protection in terms of liability. It can also show potential investors that you're serious about handling your business in a professional manner. Before you enter into the incorporation process there are many factors you'll want to consider. 

Will I be able to conduct business throughout the country?

If you make your company a federally incorporated company then you'll be able to conduct business across all of Canada. On the other hand, a corporation who files under OBCA is restricted to doing business in Ontario exclusively, unless it obtains additional licenses. Understand that choosing between a provincial or federal incorporation would depend on the type of business that you run and your vision for the future.

What are all the filing requirements?

As a corporation you'll have to follow the laws of "general application, requiring registration, returns and/or fees" as they apply to each particular province. These requirements are all contained in the CBCA provisions. Additionally, any time there is a change in your corporation you'll need to make necessary filings. There are other restrictions under the Business Names Act which pertains to the name you can select for your company.  

Where can I hold my board of director's meetings?

If you are a federal corporation you can hold those meetings anywhere in Canada. With a provincial corporation those meetings must be held within your province. These requirements should be spelled out in the filing papers.

Filing for incorporation will require you to look ahead to the future of your business. It might seem less costly to do the minimum amount of legal work for a "simple" incorporation application. That approach could come back to haunt you when your business takes off and you look to expand throughout the country. There will be a lot of effort going into your incorporation filing. Make sure you explore all your options to ensure the greater potential for success. In other words, cover all the bases ahead of time and you'll come out on top! 

For more information on incorporation and to place an order to have our experienced paralegals draft  articles of incorporation on your behalf, please visit our website at www.CorporationCentre.ca.