Lowball Your Bids Forrest City AR

Posted by : Joe Farace

The laborer, selling his labor in competition with other laborers who underbid each other until their wages just barely cover their cost of sustenance, also never gets rich. --Benjamin J. Stein

These words sum up some thoughts I've expressed over the years about how some small business owners think the only way to attract new clients is through lowball estimates that undercut their competition. These business owners are blind to the fact that this kind of short-term thinking doesn't build client loyalty and only reduces an operation's profitability.

SOHOers in the service industry refer to lowball estimates as "giving away your work," and that's a fair analogy. Don't believe me? Take this test: Open the Yellow Pages to the section listing businesses similar to yours. Run you finger down the page looking for competitors who were there five years ago. How about 10 years? The list gets a lot smaller, doesn't it?

While some SOHO operators believe customers will only flock to them if they are inexpensive (read cheap), that doesn't mean the concept of discount brokers or discount auto parts isn't valid. The difference is that low prices were part of the business plan for operations, such as www.discountautoparts.net, from day 1. How they make money, in contrast to SOHO operations, is through volume.

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