Building up a business and sustaining it is no joke, it takes a lot of time, mental strength and effort to start up a venture whether big or small. But what if friends and family decides to patronize a business owner as a way of showing support but they always expect special treatments in the course of the patronage, let's say, they always want some discounts from the original price of a product on sale or even a service? It might put one on a tricky spot whether or not to keep giving out those discounts in favor of those friends and relatives. It would be very helpful to consider how to keep one's business thriving without having to deal with the pressure of pleasing close relations whose patronize a business.
- Maintaining a fixed and fair pricing policy
Every business owner aim at making profits at the end of the day to enable him cover his costs and keep his business running. What effects might constantly giving out discounts have on a business? Let's assume one starts up a pastry business and starts selling cupcakes, assuming the cost of making a cupcake is $3 and he decides to sell them at $5. He makes 10 cupcakes every day, which means he's expecting a total sale of $50 at the end of the day. Then at the course of sales, he sales 5 cupcakes at $4 each for friends who came to patronize him. At the end of the day, he won't be getting his $50 anymore, his profit declines and if that happens constantly, it would really affect his business, he may not be able to keep making 10 cupcakes anymore.
Sticking to the original price of a product sold or a service given out for all customers will help a business owner thrive and ensure he stays long enough in the market and also ensures he has enough profit to take care of all expenses incurred at the point of his production. Besides, how will other customers feel when they realize a business owner favors specific persons over the rest? It may really look professional, some of the customers might be offended by such actions and withdraw their patronage even.
- Making the boundaries
If a business owner starts getting the downside of giving out too many discounts, then maybe it's time to put up some boundaries. Communicating to friends and family about the effects of the discounts on his business will be a very effective approach.
Personally, I have a cousin who sells phone accessories and any time I need something related to that, I would love going all the way to her shop to get it because I knew I would get a discount. At point, I stopped getting those discounts and I felt somehow disappointed. My cousin explained to me how her business runs and why I would no longer be getting discounts from the things I buy from her. It was quite understandable why she chose to stop giving out discounts for the sake of her business and at the end of it all, I realized how much effect those little minuses can have, especially since I wasn't the only one getting them.
With clear communication, individuals can be able to know what to expect before patronizing a business and it will be helpful to avoid any misunderstanding in the course of patronage.
- Making a clear discount policy
A business owner should let his customers know when to expect a discount. This policy should be made to apply to every who patronize him and not just to specific persons. There may be specific seasons for discount selling, for example during the christmas season over here, everyone already knows that a lot of business owner offer discounts so they look forward to it. When everyone knows the rules, it accords for more transparency in a business and helps it keep thriving.
Keeping a balance between relationships and business is a way to keep a business to attain more success in the market. If we think about it, friends and family can still support a business without even directly patronizing the owner. Like I mentioned my cousin who sells phone accessories earlier, I can refer my friends who may be in need of those items to my cousin shop and they will be able to get what they want. Referrals and advertising is also a way relations can show support for a business and help it grow.
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