What You Need to Know About Value-Based Pricing

Today, businesses including tow truck burke va are increasingly operating online to capture a wide market. Pricing for products are services are now displayed online with customers having a plethora of options to choose from. Most companies are aiming at providing value in everything they do for their customers, and this has prompted the need to price their products and services based on the value they offer. Value-based pricing has a lot to offer. It is a solid strategy used by most businesses, has its pros and cons, as we are going to see in this post.

What is value-based pricing?

Value-based pricing is a pricing strategy used by businesses to charge products and services at a rate they believe customers will be willing to pay. This comes as opposed to calculating production costs and applying a standard markup. Instead, businesses gauge the perceived value to the customers and charge accordingly. Value-based pricing is common in different instances. First, it when it comes to recognizing inelastic demand. This is where the need for the product is so high that a lower price would have little to no impact on the unit sales.

Another is when there is a competitive and price-sensitive market. Since all levels, if competition usually settles at a price where consumers are willing to pay, and charging more could turn away interested buyers looking for a good deal. Another instance is what we call promoting prestige. This happens where markups will be higher than usual to denote the exclusivity and the grandeur of the product. A final instance relates to selling companions and add-ons to other products. With this point, it aims at enhancing the functionality of the product being sold.

Here are ways you can set your value-based pricing;

Analyze your customers

This is because your price points will be exclusively based on what your customers are willing to pay, and you will need to confidently know what price point is. One step towards reaching this number is to have contact with your existing customers who are familiar with your products and services, and learn what they would spend on your products, now that they see the value it offers. Note that the pricing approach should be based entirely on the perceived value of your customers.

Analyze your market

Another way of going about it is to analyze your total addressable market. While customer data is crucial in setting a price point, it will be a biased sample. This is because existing customers have proven they are willing to purchase your product. To reach an accurate price point for acquiring new customers, you need to conduct market research in your total addressable market to understand how everyone attempting to sell to, values your products or services, and what they are willing to pay for it. You will need to conduct a competitive analysis, especially if your product is new to the market. Look for the competition to see what they charge and how similar your product is to what they are selling.

A Simple Guide to Task Management

Task management is a pretty basic concept. It involves taking a task like equipment transport from its basic level to implementation. That involves its status, importance, time requirement as well as financial investments. If you are an independent contractor, task management tools and techniques will help you in crossing items off your to-do list. If you are working in a team, you can implement task management strategies to stay in sync, productive, and within the deadlines.

It is very important to place a priority on tasks to keep track of the ones that need your first focus and which ones you need to attend to later. While you are free to come up with your labels, the most common ones are ;

– Critical

– High

– Medium

– Low.

Additionally, you will not be able to know how much progress you have made on a task if you don’t keep track of its status. There will be new tasks whereby you have created a task but you haven’t started working on it yet. There will be those tasks in progress which you are working on. There will be those tasks on hold or postponed that you are temporarily pausing work on. Then there are finished tasks as well as deleted ones.

If you want to manage tasks in a better way, here are some of the tips you can apply;

Avoid Multitasking

We all struggle to stay focused on one activity or goal especially when something abruptly comes to our memory and you want it cleared as soon as possible. The key to remaining productive is handling one task at a time. Keep working on the original task you have scheduled and avoid distraction and attempts to work on a subsequent task. Remind yourself it will be more productive in the long run to stay committed to one task.

Centralize Everything

Along other similar lines, ensure all your tasks are well centralized. You might have a physical note or a piece of paper on your table, to ensure everything is well centralized and out according to plan. There are different apps such as Evernote and Trello, that can help you top stay more focused. Get an app that keeps all your tasks together in a centralized manner.

Break down tasks

You need to make each task as simple and actionable as possible. That means you must look for a way of breaking tasks into smaller actionable units. Break a complex task into small steps and procedures that need to be followed and see how easy it becomes to have that particular task implemented.

Add Everything

It is important to ensure you add every task that needs to be worked on. If a task doesn’t get added to your to-do list, it will normally not get done. Additionally, you will miss the satisfaction of ticking items on your list. You must keep a note of every task that needs to be done, both personal and professional ones. It is important you also set reminders and deadlines as well of the things that need immediate attention. If you have a lot of tasks to handle, ensure you automate everything.

Everything You Need to Know About Working Capital

Working capital is very important for the growth of any business, whether you are looking to expand, take in new projects, or remain afloat tough economic times. Working capital will support the running costs of your business and can help you outgrow your competition. Roof repair Fredericksburg and other businesses have been able to realize growth fast as a result of having a good working capital.

What is working capital

Working capital simply refers to the money you have at hand. It can be savings from your profits, a bank loan, or other means of raising capital. You use this capital to fund your day to day operations and cover all expenses. To calculate your working capital, you need to subtract your current liabilities from current assets. Current assets are cash and assets that you can convert into cash within a year. These assets may comprise of accounts receivable. inventory as well as short term investments.

When it comes to current liabilities, these are short term debts or accounts you need to settle within a year. They include accounts payable, sales tax, overdraft, wages, and payroll expenses. You should always aim to have more current assets than liabilities and have positive working capital. In case your current assets do not exceed your current liabilities, you will be faced with a deficit that could cause you problems paying a debt.

When you need working capital

There are two main scenarios to explain when you need working capital. To keep your business afloat when there is less money coming in. It can be due to economic slowdown or when you are involved with seasonal businesses. You also need working capital to fund the growth of your business such as expansion or opening new branches. You may be starting a large project in which you can only get paid upon completion.

There are a couple of strategies you can use to get working capital.

Speed up the collection process

Working capital shortages normally happen due to delays in receiving payments from clients. The delays will lengthen your working capital cycle making it take a longer time to convert your current assets and liabilities into cash.  You need to track collection time with clients to make it easy to know which clients are slow payers. You can also renegotiate payment terms with existing clients so that they can pay sooner. You can also invest in invoicing tools to help you get paid faster.

Request for upfront deposits

There is nothing more frustrating than a project coming to an alt due to a shortage of cash. Asking for an upfront deposit will give you some working capital to cover for the costs of your project. Deposits will also minimize the chances of non-payment. While deposits will give you extra cash, charging deposits is not always the best option. You may charge a deposit on a client during the first interaction, but waive it as you continue to trust the client.

You can also consider peer to peer lending and getting loans from financial institutions to bolster your working capital.