Thursday, April 9, 2009

Prices Slashed

On my way home from work, I noticed signs for sales the whole way. Fabric 25% Off! Massage $39/Hour. Going out of business, everything must go. Moving sale. There really is no denying that the economy is really affecting small businesses. As a new small business owner, I can attest to the fact that our business is not getting off to the booming start for which we were hoping and planning.

I personally alternate between being glad of the sales and wondering if this is what these businesses have to do just to keep their doors open and how bad is it really? For example, what is the original mark-up on fabric? If its a 2x mark up and it's all marked down by 25% that cuts profits on that fabric by 1/2, but it may be worth it for that proprietor to get some positive cash flow.

For service industries, like mine and the massage therapist who's price was 20$ less than most massage therapists I know, I wonder if the compromise is to take less and hope for higher volume. That is, after all, the system of insurance summarized.

Just musing on this. With a big tax refund on the way, I may want to take advantage of the deals/help out some small businesses...with my business.

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