In a January 2019 article in Forbes magazine entitled “Make Sure Your Business is Worth Handing Over,” author Francois Botha, emphasizes that the priority of a family businesses should not “fall into the trap of prioritizing job creation for their children.” The priority should be to perpetuate the business.
Botha cites the co-founder and chairman of The Leadership Pipeline Institute, Stephen Drotter, who established the following five principals:
- Identify and fix your problems: Current ownership should deal promptly with any business problems before passing a business on to a new generation.
- Adjust Your Management to the Strategic Evolution of Your Business: Businesses evolve from the creation of a product to sell to focusing on sales, marketing and distribution to finally addressing a plateau in sales which facilitates the need for multi-functional management.
- Talk to Your People About Them: In this principle, communication with employees is key. Getting to know and understand employees is vital. What is their current role? What is their future role?
- Be on the Lookout for Talent Everywhere: There is no replacement for skilled and motivated employees, and you never know where you may find them. Find the problem solvers and innovators.
- Provide Development: This principle emphasizes that “almost everything is learned, and somebody often taught that which is learned.” Identify the needs and provide a path for employee skills development.
Making sure that a business is ready for transition to the next generation involves careful preparation. Ask the right kinds of thoughtful questions to prepare your business for the future. The current pandemic underscores the importance of succession plans or exit plans; you can rely on Rich and Jim to guide you through the process.
The simple fact is that fitness facility owners would like to have control over their own fate, but a variety of forces can prevent sports & fitness business owners from establishing their own prices. This is especially true today when the Covid-19 crisis affects gym capacity.
What should gym owners focus on in 2021?
This economic term describes the effect of a change in a product price on the demanded quantity of said product. Your company’s pricing power is linked to the demand for your products or services. If you have a high level of pricing power, you can raise your prices over time and maintain your customers.
Who Has the Greatest Pricing Power?
It is no great secret that the Amazons, Apples, Wal-Marts and auto manufacturers of the world exercise a tremendous amount of power. According to Vince Golle and Olivia Rockeman of Bloomberg News, U.S. consumer prices are headed higher. They say “In industries ranging from equipment manufacturing and construction to furniture-making, more corporate leaders are pointing to sharp rises in the cost of materials and transportation, after the pandemic upended supply chains.”
Step 1 – Providing a Branded Product or Service One step toward pricing power is to produce a branded product or service. In this way, you are able to offer something of greater value than your competitors. Through having a branded product or service, it is possible to create a higher perceived value in the minds of not just the Amazons of the world, but in the minds of consumers as well.
Step 2 – Innovating
Another path towards achieving pricing power is through innovation. Small innovations can often have an outsized impact and help a business stand out from a crowded playing field. Innovation that leads to patent production is an excellent way to gain a degree of pricing power.
Step 3 – Offering Exceptional Service
A third option for achieving a degree of pricing power is to provide what could be called “mind-blowing” service. Service that is truly a cut above what the competitors can match, positions your company to achieve pricing power. Provide services that your customers cannot find elsewhere.
There are many marketplace variables that your business can’t control. The trick is to evaluate your business, your business’s potential and the concrete and practical steps you can take starting today to achieve pricing power.
The Bloomberg article states that corporate leaders are increasingly confident that they can charge more for their products without losing business and the same increases in materials and transportations will push small business owners to do the same. The article continues “There’s no doubt that at some point that might have some impact on consumer demand. We certainly have not seen that thus far.”
For the short term, consumers seem to be willing to accept price increases and the strength of demand is going to outpace supply for some period of time.Read More