Live By Price / Die By Price

Tue, Aug 16, 2016

Financing

YOU’RE NOT CHARGING ENOUGH!

live-die-priceHow do I know that? Because EVERY Dry Cleaner can charge more. I don’t care if you charge $77 to get a suit cleaned and you’re a Couture Dry Cleaner, you can raise your prices and your customers won’t blink an eye—especially your customers.

EVERY Dry Cleaner can raise their prices. You’re customers (most of them) won’t even know you raised them. If you think your customers are coming to you for your low prices (unless you’re a one-price cleaner), you’re dead wrong. They are not. They are coming for your exceptional customer service, your smiling faces, your ability to get stains out, you’re quality and then they think about your prices.

So it’s time to raise your prices to get to the level you deserve.

The lowest price customers will go to whomever the lowest price leader is that day. There is NO loyalty; there is no service. The sale is based on the lowest price and if you continue to go after that business, soon you won’t have one. All kinds of problems arise if you limit the profitability of your Dry Cleaner. You can’t pay your staff well. You can’t replace your dry cleaning equipment. There will be no money updates for your lobby and your curb appeal. AND you’ll never have enough money for the lifestyle you hoped

You don’t want to throw money away. Leaving money on the table or on the rack is not good for any Dry Cleaner or any business for that matter. Getting a decent and fair price is mandatory today for staying in business.

One of the best ways to hike your Dry Cleaner’s prices is to do it in small increments and do it often. Most (and I mean most as you’ll see in a moment from the story I’m going to tell you) of your customers won’t notice a 3-5% increase in your prices, but all of a sudden you’ll see a big jump in your cash flow because that is PURE PROFIT!

Dave joined my consulting group in September of 2010. His Dry Cleaner was generating $4,ooo,ooo in revenues at a 12% profits margin. Believe it or not, Dave was strapped. He didn’t take a vacation in 5 years. He was working 70-80 hours a week running himself ragged.

You would think that $480,000 in personal income was enough, but it wasn’t. He had a bigger house, bigger car, bigger everything. Dave was even doing $10/hour work. Can you believe it? This guy was making over 400K and he couldn’t afford an assistant to help him through the day.

I asked Dave, “When was the last time you raised prices?” He told me that the recession of 2008 scared him and he didn’t want to raise prices because he was afraid he’s lose all his customers.

So I said, “How would your life change if you could add $33,ooo/month or $400, 000 per year to your income?” I’m sure you can guess his answer. He told me it would be night and day. He could hire the assistant he always wanted and could take the noose off of his personal expenses. And he also said that he and his family could finally take a vacation.

Okay I said. Let’s talk about raising your prices. I asked him, “If you raised your prices by 10% which will give you that extra $33 thousand a month, how many of your customers do you think you’ll lose?”

Dave thought about it for a minute or so and said, “I think I’ll lose no more that 25% of them.”

So if Dave lost 25 percent of his customers, he would still make $660,000, which is still $180,000 more than he’s making now. Actually it’s more, because his expenses would be less. He was okay with that.

I said, “If you lost 50% of your customers you’d still make the same amount of money… probably more because your expenses would be a lot less. Do you think you’d lose 50% of your customers?”

Dave said, “NO”.

Now here is the tricky part. I got Dave to admit that his income would not go down if he lost 50% of his customers and he would make the same amount of money, but he still has to go into his software and raise his prices. Most Dry Cleaners can’t do this even with this overwhelming evidence that they would still make the same amount of money. Somehow they are worried about the lost customers. They weren’t really your customers anyway. They’re the ones that would jump ship if some cleaner came along and beat your pricing by a nickel.

Dave said, “NO way am I going to lose 50% of my customers.” I got Dave to COMMIT to me that he would raise his prices this coming weekend by 10%. I got him to admit it several times. I told him I would call him Monday morning to check up on him.

I called Monday morning and he raised his prices like he promised me. He had the balls to do it. He really had no choice. He was going crazy and was thinking of selling off parts of his Dry Cleaner it to raise some needed cash.

We talked a week later. “Dave, did you lose any customers?” “Don’t think so. I was watching and didn’t notice anything.”

One month later: “Dave, did you lose any customers?” “Just one or two maybe.”

Two months later: “Dave, what’s going on?” “Really Greg, it’s unnoticeable. I only lost a few customers.”

One year later: Dave hired an assistant. I see Dave and his family on Facebook finally taking a vacation.

6 years later: Dave and his family seem to always be on vacation. Latest trip is to Scotland and Ireland. Dave is living the dream.

Dave added dry cleaning consulting to his business. For $5,000 a day he will come and teach you among a few other things… HOW TO RAISE YOUR PRICES!

This is an extreme example of raising prices for your dry cleaning business, but it’s true for your business no mater the size. If you’re doing $500K, you just added $50,000/year or $4,166/month to your income. Four big ones is nothing to sneeze at.

The ONLY thing you gotta do is make a few clicks on your keyboard and raise your prices.

CAN YOU DO THAT?

Don’t just nod your head and say you’re going to do it. STOP right now whatever you’re doing and raise your prices.

By the way… there is no perfect time to do this. Now is the ONLY time to do this. I don’t care if it’s Monday or Wednesday or Friday—GET IT DONE!

Give yourself a raise. Get out of debt. Raise your lifestyle. Smile all the way to the bank.

You are a businessperson. This is what a good businessperson does.

Your customers (99.5% of them) will not even notice. And the ones that do—“FUHGEDDABOUDIT…”

If you’d like me to help you through this for FREE, email me at greg@drycleanerprofits.com and we’ll set up a time to talk. I’d be delighted to get you’re the money you deserve out of your business.

I’d love to hear you comments below.

Go to it!

Call 888-661-1992 to set up a FREE 30-minute consult with me about your routes and/or your counter business or anything you’d like to talk about in your dry cleaning business.

 

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