Author: Christine Kriz

Pricing Strategies for Small Business Owners: A Comprehensive Guide

Published: Published: | By Author Christine Kriz
Pricing is a crucial aspect of any business, and small business owners need to get it right to stay competitive and profitable.
 
With various pricing strategies to choose from, it can be overwhelming to determine the best approach for your products or services. In this post, we’ll explore nine common pricing strategies, their advantages, and how to combine them effectively.

1. Cost-Based Pricing

This method involves calculating the cost of production (including materials, labor, and overheads) and adding a markup to determine the selling price. The markup can be a fixed percentage or a specific amount.
 
Example: A t-shirt manufacturer calculates the cost of production at $5 per unit and adds a 50% markup, setting the selling price at $7.50.

2. Market-Based Pricing

In this approach, businesses analyze the prices charged by competitors for similar products or services. They may set their prices slightly above, below, or equal to competitors’ prices based on factors like quality, brand positioning, or unique selling points.
 
Example: A coffee shop sets its prices similar to those of nearby competitors, but offers a loyalty program to attract and retain customers.

3. Value-Based Pricing

This strategy focuses on the perceived value of the product or service to the customer. Business owners assess the benefits and advantages their offerings provide to customers and set prices accordingly. This method often allows for higher prices if the perceived value is high.
 
Example: A software company sets its prices based on the value its product brings to customers, such as increased productivity and efficiency.

4. Demand-Based Pricing

With this approach, businesses adjust prices based on demand. They may lower prices during slow periods to stimulate demand or raise prices when demand is high to maximize profits.
 
Example: An airline adjusts its prices according to seasonal demand, increasing prices during peak travel seasons and decreasing them during off-peak seasons.

5. Psychological Pricing

This tactic involves setting prices to influence customers’ perception of the product’s value. For example, pricing products at $9.99 instead of $10 creates the
perception of a lower price, even though the difference is minimal.
 
Example: A retailer prices its products at $9.99, $19.99, or $29.99 to make them appear more affordable.

6. Penetration Pricing

This strategy involves setting initial prices lower than competitors’ prices to gain market share rapidly. Once the business establishes itself, prices may be gradually increased.
 
Example: A new restaurant sets its prices lower than competitors to attract customers and build a loyal customer base.

7. Skimming Pricing

In contrast to penetration pricing, skimming involves setting high initial prices to target early adopters or customers willing to pay a premium. Prices are later lowered as competition increases or as the product reaches a broader market.
 
Example: A tech company sets a high initial price for its new product, targeting early adopters and then lowering the price as the product becomes more widely available.

8. Dynamic Pricing

This method involves adjusting prices in real-time based on various factors such as demand, seasonality, time of day, or customer demographics. It’s commonly used in e-commerce and hospitality industries.
 
Example: An online retailer adjusts its prices based on customer location, offering discounts to customers in certain regions.

9. Bundle Pricing

This strategy involves offering multiple products or services together at a lower price than if purchased separately. It encourages customers to buy more and can increase overall revenue.
 
Example: A software company offers a bundle of its products at a discounted price, increasing the average order value.

Combining Pricing Strategies

Small business owners often need to combine pricing strategies to achieve the best results. For example, a company might use cost-based pricing as a base and adjust prices based on market conditions and customer demand.
 
 
Pricing is a complex and ongoing process, and small business owners need to be flexible and adaptable to stay competitive.
 
By understanding and combining these pricing strategies, you can find the perfect balance for your business and drive growth and profitability.
 
For strategic help with pricing, please reach out to our team of experts at the Laurel Ridge SBDC.  We’re here to help you at no charge, EVER!
 
For additional idea about pricing, check out America’s SBDC.
 

Setting Up an LLC and Fictitious Name

Published: Published: | By Author Christine Kriz

 

Registering an LLC (Limited Liability Company) in Virginia and obtaining a fictitious name, also known as a trade name or a Doing Business As (DBA) name, involves several steps. You must renew your LLC license each year with the Virginia SCC. Following is a general guide to help you through the process for registering online.  Should you have any questions please reach out to the Laurel Ridge SBDC office at 540-868-7094 or mailto:email [email protected]

  • Choose a Name for Your LLC:
  • Register Your LLC with the Virginia SCC:
    • You will need to set up an account on the Virginia SCC website (https://cis.scc.virginia.gov/). Once your account is set up, please login.
    • Once logged in please select “Online Services.”
    • Select “New Businesses” from menu list.
    • Click on arrow next to “Business Entity Type” and click on “Limited Liability Corporation.”
    • Click on the arrow next to Filing Type and choose “Articles of Organization” then click continue.
    • You must choose the name for you LLC. Your LLC’s name must be unique and distinguishable from existing businesses registered in Virginia. In the space next to “Entity Name” type in your desired name and hit enter.
      1. If the message you get says that “name is not distinguishable,” you must choose a different name.
      2. If the message you get states “name not allowable,” you must type a comma after the name and add LLC.

Once you get a message that states “name is allowable”, please click on “Next” in the bottom right corner.

  • On the Articles of Organization page, please enter the contact information requested, selecting “perpetual” for time period and hit next in the bottom right of screen.

 

  • Designate a Registered Agent:
    • You will need to designate a registered agent for your LLC in Virginia. A registered agent is responsible for receiving legal documents and official mail on behalf of the LLC.
    • In Virginia, a registered agent can be any one of the following:
      1. An individual who is a resident of the Commonwealth and is (i) a member or manager of the limited liability company,
      2. a member or manager of a limited liability company that is a member or manager of the limited liability company,
      3. an officer or director of a corporation that is a member or manager of the limited liability company,
      4. a general partner of a general or limited partnership that is a member or manager of the limited liability company,
      5. a trustee of a trust that is a member or manager of the limited liability company, or
      6. a member of the Virginia State Bar, and whose business office is identical with the registered office.
    • On the registered agent screen, type in the contact information of your registered agent and click on “Create Individual RA”
      1. On RA capacity select appropriate title from pull down menu. Most will be “Member or Manager of LLC.” Once all contact information is entered, click on “Done”  On the next page you must check the box to select that the registered agent is a resident of Virginia.  When complete with appropriate information select “Next” at bottom right of screen.
    • On the Principle Office Location page enter the information of your company office. This is the official location for mail to be delivered. When complete hit “next” at bottom right of page.
    • On the Principle information page, most LLCs will be member managed. Select appropriate and click next at bottom right of page.
    • On the Supporting Documentation page, you may not be required to upload additional information. Please click “next” at bottom right of page.
    • On the Signatures page please type in appropriate information and hit “add” and then scroll down to select “next” at bottom right of page.
    • Review the information on the Articles of Organization page and then select “Add to shopping cart” at bottom right of page.
    • The fee as of October 2023, is $100. Select “checkout” and pay fee online. After you have paid the fee, you will want to print and download your Articles of Organization.
  • Get an Employer Identification Number (EIN):
  • Create an Operating Agreement (Optional):
    • Although not required by Virginia law, it is a good practice to create an operating agreement for your LLC. This document outlines the internal management and operating procedures of your LLC. Should you need an Operating Agreement template to help you get started, please reach out to your local SBDC.
  • Comply with State and Local Business Licenses and Permits:
    • Depending on your business type and location, you may need additional licenses and permits. Check with your local government and the Virginia Department of Taxation to ensure compliance.
  • File Annual Reports:
    • LLCs in Virginia are required to file an annual report with the State Corporation Commission. This report typically includes updated contact information and is due by the anniversary date of your LLC’s formation.
  • Pay Taxes:
    • Ensure you understand your tax obligations, including state and federal taxes. You may also need to register for Virginia state sales tax if applicable to your business.
  • Maintain Records:
    • Keep accurate records of all business activities, financial transactions, and legal documents related to your LLC.

It is advisable to consult with a business attorney or an SBDC that specializes in business formation to ensure you complete all the necessary steps correctly and efficiently. Additionally, specific requirements and fees may change over time, so it is essential to check the most up-to-date information on the Virginia SCC website and consult with local authorities when registering.

 

What is a Fictitious Name?

Published: Published: | By Author Christine Kriz

Sole proprietors in Virginia who want to operate their business under a name other than their own legal name need to understand the requirements and process for using a fictitious name, also known as a “trade name” or “doing business as” (DBA) name. Here are some key points for sole proprietors to know about fictitious names in Virginia:

  1. Registration Requirement:
    • In Virginia, sole proprietors must register their fictitious name with the Virginia State Corporation Commission (SCC) before using it for business purposes. This is done to provide transparency to consumers and protect the public from fraud.
  2. Business Entity Type:
    • Fictitious names are typically associated with sole proprietorships, partnerships, or LLCs, as they allow these business structures to operate under a name that is different from the owner’s legal name.
  3. Name Availability:
    • Before registering a fictitious name, sole proprietors should check the SCC’s online database to ensure that the desired name is available and not already in use by another business entity.
  4. Registration Process:
    • To register a fictitious name, sole proprietors must complete and submit the “Fictitious Name Certificate” (Form CN-01) to the SCC. This form can be filed online or by mail. There is a filing fee associated with this registration.
  5. Registration Renewal:
    • Fictitious name registrations in Virginia are valid for five years. Sole proprietors must renew their fictitious name registration with the SCC within 60 days prior to the expiration date. Failure to renew can result in the name becoming available for others to use.
  6. Business Bank Account:
    • Once the fictitious name is registered, sole proprietors can open a business bank account under that name. This is important for separating personal and business finances.
  7. Legal Protections:
    • Registering a fictitious name does not provide legal protection for the name itself. If you want exclusive rights to the name, you may need to consider trademark registration with the United States Patent and Trademark Office (USPTO).
  8. Business Licenses and Permits:
    • Depending on the type of business you operate, you may need to obtain specific licenses or permits from local or state authorities in addition to registering the fictitious name.
  9. Compliance:
    • Sole proprietors using a fictitious name must comply with all applicable state and local laws and regulations related to their business activities.
  • Public Disclosure:
    • Information about the registered fictitious name, including the owner’s name and address, is publicly available through the SCC’s database.

It’s essential for sole proprietors in Virginia to follow the proper registration process for their fictitious name to ensure legal compliance and establish a distinct business identity. Consulting with a legal or Laurel Ridge SBDC professional can help navigate the registration process and understand any specific requirements related to your business activities.

 

 

How do I optimize my website for Google search engine?

Published: Published: | By Author Christine Kriz

Optimizing your website for Google search results involves various strategies and techniques collectively known as Search Engine Optimization (SEO). SEO aims to improve your website’s visibility and rankings on search engines like Google, leading to increased organic traffic. Here are some essential steps to optimize your website for Google search results:

  1. Keyword Research: Identify relevant keywords and phrases that your target audience might use to find your content. Use tools like Google Keyword Planner or other keyword research tools to discover high-traffic and low-competition keywords.

  2. High-Quality Content: Create valuable and engaging content that satisfies the intent of your target audience. Google values well-written, informative, and relevant content. Focus on creating comprehensive and authoritative articles that answer users’ questions.

  3. On-Page Optimization: Ensure that your target keywords are used naturally within your content, meta tags, headings (H1, H2, etc.), and image alt tags. However, avoid keyword stuffing, as it can negatively impact your rankings.

  4. Mobile Optimization: With the majority of searches now happening on mobile devices, ensure your website is mobile-friendly and provides an excellent user experience on all screen sizes.

  5. Page Speed: Optimize your website’s loading speed. Google considers page speed as a ranking factor, and faster-loading pages tend to rank higher in search results. Use tools like Google PageSpeed Insights to identify areas for improvement.

  6. Use Descriptive URLs: Create clean, descriptive, and user-friendly URLs that include relevant keywords. Avoid using generic URLs with numbers or meaningless strings.

  7. Internal Linking: Link relevant pages and posts within your website to create a logical and organized structure. Internal linking helps Google understand the content hierarchy and improves user navigation.

  8. External Linking: Link to reputable and authoritative websites when it makes sense. Outbound links to high-quality sources can add credibility to your content.

  9. Secure your Website: Use HTTPS to encrypt data transmission between your website and users’ browsers. A secure website is now considered a ranking factor, and it instills trust in your visitors.

  10. Optimize Images: Compress images to reduce their file size without compromising quality. Properly optimized images can improve page load times and user experience.

  11. Implement Schema Markup: Add schema markup to your content to help search engines understand the context and relevance of your pages better. This can lead to rich snippets in search results, improving click-through rates.

  12. Regularly Update Content: Keep your website fresh and up-to-date by adding new content and updating existing pages. Fresh content signals to Google that your website is active and relevant.

  13. Monitor Analytics: Use tools like Google Analytics to track your website’s performance, user behavior, and traffic sources. This data will help you understand what works and identify areas for improvement.

Remember, SEO is an ongoing process, and it may take some time before you see significant improvements in search rankings. Stay up-to-date with SEO best practices, and adapt your strategies as search engine algorithms evolve.  Have questions?  Reach out to me at [email protected] to set up a free consultation.

 
 

Do these small business challenges affect you?

Published: Published: | By Author Christine Kriz

Small business owners face a wide range of challenges, and these can vary depending on the industry, location, and specific circumstances of the business. However, some of the most common issues that small business owners encounter include the ones that follow.  If you have business questions we can help you.  Email [email protected]

  1. Financial Management: Struggling with cash flow, budgeting, and financial planning are frequent challenges for small business owners. Keeping a close eye on expenses and revenue is essential for sustainability and growth.

  2. Marketing and Customer Acquisition: Many small business owners find it difficult to reach their target audience and effectively market their products or services. Customer acquisition and retention are critical for long-term success.

  3. Competition: Small businesses often compete with larger, more established companies, making it challenging to gain market share and stand out in a crowded marketplace.

  4. Regulatory Compliance: Navigating complex regulations and legal requirements can be overwhelming, especially for small businesses with limited resources.

  5. Staffing and Talent Management: Finding and retaining skilled employees on a limited budget can be a significant hurdle. A small team’s dynamics and performance can greatly impact the business’s success.

  6. Technology Adoption: Keeping up with rapidly evolving technology and incorporating it into the business can be daunting for small business owners.

  7. Time Management: Balancing multiple responsibilities and tasks is a constant struggle, leading to time management issues and potential burnout.

  8. Inventory and Supply Chain Management: For businesses involved in selling physical products, managing inventory levels and supplier relationships can be challenging.

  9. Economic Uncertainty: Small businesses are more susceptible to economic downturns, and uncertain market conditions can impact their stability and growth prospects.

  10. Adapting to Market Trends: Being agile and responsive to changing consumer preferences and market trends is essential, but it can be difficult for small businesses to pivot quickly.

  11. Access to Capital: Securing funding and financing for business expansion or investment in new projects can be a significant obstacle for small business owners.

  12. Online Presence and E-Commerce: In the digital age, having a strong online presence and e-commerce capabilities are crucial, but some small businesses struggle to establish and maintain an effective online presence.

  13. Healthcare Costs: Providing healthcare benefits for employees can be a significant financial burden for small businesses.

  14. Risk Management: Managing and mitigating risks, such as legal liabilities, cybersecurity threats, and natural disasters, can be challenging for small businesses with limited resources.

  15. Scaling the Business: Transitioning from a small operation to a larger business requires careful planning and execution, presenting its own set of challenges.

Addressing these issues requires a combination of strategic planning, adaptability, and seeking professional advice when needed. Small business owners who are proactive and resourceful are better equipped to overcome these challenges and achieve long-term success.

 
 

Someone hacked my Facebook business account? How do I get it back?

Published: Published: | By Author Christine Kriz

Hackers are targeting the personal Facebook accounts of individuals who have admin access to business accounts.

If you use Facebook and Instagram for either organic or paid marketing, you MUST take steps to secure your account.
These 3 essential steps could mean the difference between your account’s safety and vulnerability:
Require Two-Factor Authentication
Assign a Backup Admin
Use Third Party Authenticators

Not sure what this means or how to do this?
Email [email protected]

How Do I Get More Customers?

Published: Published: | By Author Christine Kriz

The cost of acquiring new customers has increased almost 60% over the past six years. If this is something you’re struggling with, you’re not alone: 49% of companies report that customer acquisition is their primary marketing objective.

Even with the best small business ideas, spraying and praying doesn’t work for anybody — you need to make sure you’re spreading the word to the right people.

Here’s something to think about:
Finding customers starts with figuring out who your ideal customer is. You may sell to everyone between ages 18-60 BUT who buys the most from you?
What age are they? Are they male or female? Income level?
Where do they get their information from?
What do they care about?

Are you offering a solution to a problem that people are willing to pay to solve?

Are you using pictures of people in your marketing that are similar to your ideal customer? Can your customer relate to your marketing?

If you’re struggling with finding new customers please reach out to us for a
marketing consultation! Email [email protected]