Value is not equal to price

Every generation needs a revolution - an entrepreneurial revolution

Prospects often reject your offer because of price.   And sometimes becomes sore spot of the sales negotiation and the sale may be stalled.   " You are way too high"  But price is not equal to value

How to neutralize:

1.  You are the value to the transaction:    your voice your prsentation, your character, the trust of the 

      prospect in you.  

2.  You create the value in your presentation as you uncover the benefits of the product or service to the

     prospect.

     You create the value by:

     1.  Highlighting the need, the match up between the product benefits and prospect need.

     2.  Creating the sense of urgency:

          1.  The prospect's loss in case he/she does not buy

          2.  The product is of choice location

      3.  Create urgency.  

          1.  A one time promo

          2.  You have limited time and lot of ground to cover

3.  Thus defer, deflect defuse the need for price revelation in the beginning.  Do it at later part of presentation

Is this of help.?  Text +63 908 928 7888 if you need more materials, coaching or seminar or dm

                         jorgeus george.  Or Gmail.  profjorge.entrep@gmail.com

Methods of Pricing

Every generation needs a revolution - an entrepreneurial revolution

This post answers the question or is same topic as business, product valuation

The methods are:

1.  Competitive

2.  BE pricing

3.  Time

4.   Cost plus,

5.   Package or bundling

6.  Value pricing

Which do you use?

1.  Competitive.  Your tool here is competitive or customer research.  Find out how your competitiors price their products.  Based on your positioning, you can price your product equal to lower or higher than the competitor.

2.  BE prcing.  Compute for your total cost:     Varicable cost and Fixed cost.   At what price do you neighter lose or make money

3.  Time.    PHP/hour.  Often employed by lawyers, consultants, coaches accountants

      PHP/hour     php/day.  But there is conflict of interest or disincentive for efficiency.  Normally the    seller would use the higher more expensive charge.  Not the lesser more efficient.  The                        solutiontn for this is value pricing

4.  Cost plus

     Total materials, labor inputs and add%  as profit for the seller

    Again there is COI here.  The seller tends to input more expensive materials or labor to get higher

    share fee for himself.  Take example in  nearby project.  The architect dug 6 storey foundation for 

    3 storey building.   It took longer and spent more time before they were able to rise above the

   foundation  The architect, friend of the owner, got more hefty fees.    To avoid

5.  Package bundling

  What is the value of each of the component project.  Then add.  That is your price.  You may or

   may not give a discount

6.  Value pricing

     This is total project cost;   labor and materials

     +  x amount if you finish this on time

     +  y amount if below budget

Is this of help.?  Text +63 908 928 7888 if you need more materials, coaching or seminar or dm

                         jorgeus george.  Or Gmail.  profjorge.entrep@gmail.com

Keeping steadfast to corporate vision and mission - how to run a business

Every generation needs a revolution - an entrepreneurial revolution

My late father was a lawyer.  But he advised us when we were in business not to let lawyers run the business.   In contracts, the businessman decides what he wants to agree on and directs the lawyer to draft the contract legalese.  Therefore, avoid suing and going to courts.

The business must concentrate on providing value to the customers ie removing pain, and providing gain.  Building the system, the processes, the inputs and ensuring customer satisfaction and experience.

Therefore do not be the first to sue, try to settle the issue without the courts or the lawyers, because you expend resources, energy and the passion in the court case. And distracts you from the main vision and mission of the company.  We experienced having a partnership with a party who did nothing but sue us.

Now that we dont have inventories, we heard that she is impoverished.    Talk about Karma.

Some companies just do that:  continuous lawsuits, motions etc to run the business.  Some high tech companies even the top 20 in the world have been known to spend so much on patent infringement, and endless conflict on competitors.  We have not heard of any innovation from the company as it was doing before   May be too much attention on suing.  

Is it a good business practice to sue?

Business valuation using correct formulas using dubious data

Every generation needs a revolution - an entrepreneurial revolution

This post was shown a due diligence report but reporting a valuation of only 6 number for a business

coughing out P4 - 5 million a year

Some errors were observed in the work purportedly a certified public accountant.  It was neither a due diligence nor a proper valuation report

1.  In the asset portion, the cash of the business totaling P8 m was totally disregarded?  What?  You are valuing the asset of the business and not considering if the cash will be dissipated or not

2  The consultant arrived at a Weighted Average Cost of Capital which was achieved only on the 5th year  And conveniently used this as WACC (ergo for the discounted cash flow the intrinsic method, a high 55% WAC would result in lower valuation

3.  In the intrinsic portion (NPV) analysis, there was no current year cash flow (and in actuality, the current net  cash flow amounts to P4.5 million

    1  In the projected cash flow for the next five years, 2023 cash flow is only P9,k

    2.  The WAC again of 55% erroneously computed is used as the discount factor.  The high %

         results in a very low valuation

PSE lists WACC at only 6.84 % and the 55% /5 is only 11%

Not every body understands business valuation    At entrepreneurship we teach  this skill

What is the importance of business process innovation?

Iloilo City   |  February 8, 2014

 

The coming of entrep guest Buddy Silva, and his other business:  software and the GPS system with telemetry  supports the idea that business process innovation creates more wealth and value for the company:

1.  The Dell model of direct to the customer, just by cutting two steps in the supply chain catapulted Dell from nowhere to leadership in the PC market; 

2.  The nautical highway and RORO disrupted the shipping business in the PHIL and this enabled companies:

     1,  reduce inventories warehousing, DCs

     2.  increase turn over  -  reduction of time to deliver.  From factories end to end to retailer took at most two days.  

     3.  reduction of back order;  goods are fresher and reach the customer in time, reducing spoilage and old products/expiring products in retailers gondolas/warehouse.

3.  A cellphone remanufacturing center reduced manufacturing time by 75 (made the process faster) thereby increasing # of outputs/production and reduced cost by 10% and this resulted in substantial profits amounting to million dollars a month.

4. A major retailer in US invested in satellite communication system to manage inventories and above all reduce the time to process credit card by mere 20 seconds.  This doubled the number of transaction during the day and the sales as well.  Ingenious eh.

5.  BPO are BPI initiatives. They are here to stay:

    1. Companies can focus on core competencies and leads to less complexities in management;

    2.  They can reject the output, which they cant do in house;

    3.  Costs are lower. albeit even better because the outsourcing has more competency and more learning experience on the processes outsourced to them

STRIVE TO IMPROVE PROCESS ALWAYS.