How Price Increases Bad Debt?

It’s harder than ever to get customers to accept price increases, thanks mainly to Alan Greenspan. But you’re making a mistake if you don’t raise prices on a regular basis.

Alan Greenspan is a wonderful guy, and he has my wholehearted support in his battle against inflation. I doubt, however, that he has the same warm feelings about people who share my philosophy on prices. I believe that as a matter of sound business practice, it’s important to raise prices regularly.

Otherwise you’ll be letting your profit margins erode and undermining the value of your company. If you’re not careful, you could wake up one day and discover you’re in serious trouble. At that point you may have no choice but to take the kind of action that will drive your customers crazy.

“I don’t have a choice a small business told me ” We haven’t had a price increase in 10 years. I’ve been giving the staff raises every year, and I haven’t been getting any additional income. Now I’m at a point where I can’t go on without a significant increase. I won’t be able to pay my bills. The place won’t survive.”

Small businesses has my sympathy. It’s never easy to raise prices, and it’s particularly tough to raise them in an environment like this one, thanks mainly to Mr. Greenspan. He’s done such a great job of fighting inflation that most people think prices shouldn’t go up at all. As for big increases, you make them at your peril. There’s simply no way to do it without antagonizing customers and thereby putting your most important relationships at risk.

Faced with such resistance, a lot of businesspeople are tempted to forgo price increases altogether, or at least put them off for as long as possible. If you do either one, however, you’re making a big mistake. Granted, you may not feel the pain for a while. If your sales are going up, you’ll probably be able to take home the same amount of money from one year to the next. As a result, you may not see the risks you’re taking. In the short term, you’ll think you’re doing fine.

But, in fact, two things will be happening. First, your profit margins will be shrinking. Why? Because your costs will be going up. Even in Greenspan’s America, certain costs always rise. It’s what I call “creeping expenses.” Some types of expenses have a life of their own. If you don’t watch them like a hawk, they go up all by themselves. They may even go up if you do keep an eye on them.

In most small businesses, for example, you can count on payroll increases every year. You can expect regular hikes in insurance rates as well, and I’m not talking just about health insurance. The costs of utilities and supplies also have a tendency to rise over time. OK, some things are cheaper these days — basic phone service, for example — and computers let people work more efficiently than before. Nevertheless, your average costs per dollar of sales are going to rise from year to year. They may rise only 2% annually, but compound the increases over 5 or 10 years and eventually you won’t be earning a profit anymore — unless, of course, you raise prices.

Even if you don’t let the problem go that far, however, you’re damaging your business in other ways by not raising prices on a regular basis. For one thing, you’re gradually undermining the perceived value of your services or products. Like it or not, there’s a natural tendency to link quality and price. I’m not saying you always have to charge as much as the most expensive suppliers, but if the gap between your prices and theirs gets too large, customers will start to regard you as the cheap alternative in the market.

At the same time, you’ll be undermining the real value of your business as a whole. That’s a point most small-business owners miss. They look at the company only as a source of income. They forget that it’s also a major asset, probably their most valuable one, and — like any asset — it needs to be maintained.

That means, among other things, making sure the company has strong profit margins — as good as or better than the rest of the industry’s margins. If you let your margins erode, you’re going to have trouble when you try to sell the business. Indeed, you may not be able to sell it at all.

It’s sort of like selling a house. If the place needs a new roof, buyers will discount the price accordingly, or they’ll look for a house that doesn’t need one. By the same token, business buyers are going to shy away from a company with weak margins, especially if they’re weak because prices are too low. Who wants to buy a business and immediately start raising prices? Even under the best of circumstances, it’s tricky to maintain a customer base through a change of ownership. It’s almost impossible when you have to begin by doing something that will antagonize every customer you have.

So I’m sorry, Mr. Greenspan, but I’m going to keep raising my prices, and I’d advise most other businesspeople to do the same. The increases don’t have to be big ones. In this economy they can’t be. I have to fight for every increase I get, but I always insist on raising the price at least a little. I have to admit, however, that there is one group of people I’d encourage to ignore my advice and give Mr. Greenspan a hand in his fight against inflation: my suppliers.

Six Components at Burt & Associates

The Six Components of Leadership

There are six main factors that contribute to successful leadership, including vision, motivation, strategy, faith, values and responsibilities at Burt & Associates in Dallas Texas.Vision is a picture of the future that a leader wants to achieve, while motivation involves getting commitments from others to share that vision. Leaders must outline a strategy to achieve their visions and have a firm faith that they can overcome obstacles in reaching their goals. Values, with moral values coming ahead of economic ones, are important to make clear to employees at Burt & Associates in Dallas Texas Finally, leaders must take responsibility for any mistakes that occur on the way to achieving a vision.

8 Strategies to Improve Your Business Cash Flow

1. Social networking: The ‘free’ technology that’s anything but
2. Web Surfing: It’s costing corporate America $63 billion each year
3. Laptops and smartphones: These devices lead to 85% of companies having a security breach
4. Easy-to-decipher passwords: Sloppy habits are putting sensitive data at risk?
5. File-sharing tools: These are common threats that lead to large cash flow drains
6. IT’s policies on departing employees: Prevent them from wreaking havoc
7. Common office equipment: Overlooked technology that puts sensitive data at risk
8. Texting or talking behind the wheel: Lawsuits are skyrocketing and employers aren’t fairing well

Information from U.S. Bankruptcy Court

Have you ever needed information on a bankrupt business account but didn’t know where to turn? Don’t feel bad, most business professionals don’t either. The answer, however, is as close as your phone and often a lot quicker than searching the Internet, pulling up and searching bankruptcy websites you know of, waiting for the site to load, etc.

Each of the 91 bankruptcy court districts has what they refer to as an automated Voice Case Information System phone number or VCIS. Most are toll free. Simply call that number, press 2 and enter the case number (or enter the complete and accurate business name of your commercial account ) and presto, a recording will provide you with the business debt,attorney’s name and phone number, petition filing dates, upcoming hearing dates and much more. Try it and see how easy it is.

Commercial Business Watch Out on Bank Fees

Usually the more a customer pays, the more service or product is purchased. Not so with opportunistic banks who psych out businesses with computerized fee traps, a good process is
always look at your business statement to see if there are any hidden fees

Business Bankruptcy Protection

Many smaller commercial businesses may feel helpless when they find themselves low on the list of creditors when a large businesses files for bankruptcy protection. But smaller businesses do have recourse to protect themselves in the form of a reclamation demand. Such a reclamation provides a business the right to demand goods, which had been shipped to a customer, be returned if the customer files for Chapter 11 within a specific time period of receiving the goods. If the goods can’t be returned, the seller’s unsecured claim may be converted into an administrative expense priority claim. This move gives the claim a higher priority than ordinary unsecured creditors’ claims. Further, businesses don’t even have to wait for the bankruptcy filing in order to file a reclamation demand, which can be filed if evidence is presented that the customer is officially insolvent.

Business cry credit cards fees too high

Credit industry experts said customers' purchasing habits are dramatically different than just a decade ago as customers trend away from using cash.

In turn, many consumers have complained about the high interest rates that credit card companies charge, and now, some businesses that accept credit cards said the rates they pay to accept cards are unfair.

"People were still using cash more often -- using cash or checks for smaller purchases, like under $5 -- and, now, we don't think anything of using our card

Merchants must pay a fee every time someone swipes a card, which can have an impact on the businesses' bottom line. small businesses feel it most and have the least ability to do anything about it.

"Small businesses don't have a lot of leverage, or are (not) in a position to push back on these companies fmf oil is one of those small businesses. Company president john davis said he is not at all happy about the credit card processing fees his company has to pay with every transaction -- both a percentage and fixed fees. "They're actually making more money on a gallon of gas than we are," davis said. Davis has circulated petitions at his convenience stores throughout the state as part of a larger effort by a retail industry group to support congressional action that would increase the transparency of the fee structures and give retailers more power to negotiate. "They write the rules, you either take it or leave it and our customers demand we take it," Davis said.
The credit card industry sees it differently, responding to an inquiry by issued in a statement: "Retailers today receive tremendous benefits from accepting electronic payments, including guaranteed payment, the potential for increased sales, faster checkout times, as well as greater convenience and security -- all at a fair price. The petition drive is part of longstanding and failed attempts by retailers and their trade associations, who are no longer content with paying their fair share, to pad their profits by shifting their normal cost of business onto consumers."

The petition drive that at FMF oil locations around the state continues until Wednesday, after which time the signatures will go to a national trade group that will forward them to Congress.
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