How to be sure your price is right
Great pricing is about foresight, not hindsight. That means there is always some risk in pricing – but these seven laws will help you reap rewards…
LAW 1: There is no right price
This might sound like a riddle – but pricing in business is never an absolute. There is no right or wrong price because every price is relative to the market. If your price is too high, your product or service will sell slowly if at all. If it is too low, you will sell out much more quickly than you would normally expect.
LAW 2: Track your sales turnover
Good pricing means a product or service takes a reasonable time to sell. As an entrepreneur, you must define and aim for the turnover that you can sustain and that brings you the cashflow you need to survive and grow. Sales data is essential for this or you will not be able to decode how effective your pricing is.
An item hanging around on your shelves should be a red flag that your price is too high. Mark it down until the item sells and use this to learn about demand in your market.
LAW 3: Know your pricing benchmark
Cash Converters is in the second-hand business so our key pricing benchmark is the price of our stock compared to new goods. That does not just mean the recommended retail price.
We recognise our competitors are both other businesses in our sector and other businesses that could cannibalise trade from us – for example, a chain retailer who does a good special on TVs. So look broadly when setting your pricing benchmark.
LAW 4: Understand that prices must be flexible
One price does not fit all. Heavy competition means accepting lower prices. But where customers would have to travel a couple of hundred kilometres to buy a product or source a service, they might be prepared to pay extra for the convenience of avoiding that journey.
A price can change between being right or wrong depending on the particular time and place.
LAW 5: Know your customer’s values
When you are building your base of customers, learn what you can about them to guide you in good pricing judgements. Know what proportion of your customers value getting the lowest possible price, for instance.
If you don’t, they may still buy but suffer from buyer’s remorse and not return. Or your customer might value their time so highly that they will not waste it shopping around, whether in stores or online.
Related: How To Find The Pricing Sweet Spot
LAW 6: Research your position
When I started the first SA Cash Converters store in Parow, we had to get all our competitor information from the advertising inserts in the newspapers. Today the internet makes this process much easier, just as electronic pricing allows you to adjust your price very quickly. But the basic principle still applies that you need to know where your pricing falls in the range of prices in your sector.
If your price is in the higher section of this range, you must ensure that you justify a premium price by offering a consistent buying experience that your customer enjoys.
LAW 7: Keep your costing sharp
If you don’t know what it costs you to produce and sell your goods or services, you cannot track whether you are successfully achieving the margin that you might need to build a sustainable business.
It helps to be familiar with acceptable margins in your sector. Be sure that you include all your costs in your costing calculation – otherwise you could find yourself wondering why you are not reaching your profit projections.
Smoothie Franchise Opportunity: Puré Frooty Is A One-Of-A-Kind Smoothie Franchise Business
Looking for the next greatest franchise opportunity? Puré Frooty Smoothie is a highly perfected Australian business model launching in the South African market that doesn’t require extensive shop fitting or a large workforce.
- Brand: Puré Frooty
- Established: 2017
- Website: www.purefrooty.co.za
Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.
An Innovative Franchising Concept
This innovation in the healthy smoothie industry is ground breaking for South Africa. The machine is manufactured in Australia by a highly skilled team. It took six years to perfect this business model for the consumer market.
The vision of Puré Frooty Smoothie is to offer convenient on-the-go smoothies for anyone. The experience and quality will always be of the highest standard. We aim to be a staple convenience in malls, schools, office parks and hospitals. This is a platform that will allow for self-growth for passionate entrepreneurs.
Our mission is to create a unique customer experience. We want to satisfy the nutritional needs of customers by providing quality smoothies. Puré Frooty Smoothie will be packed with all the goodness a smoothie should offer.
The four values we pride ourselves in are:
- Customer Satisfaction.
Why Consider This Franchising Opportunity
Extensive research into the business model and market
Puré Frooty Smoothie was an idea, researched widely, by people looking to simplify the business process for the consumer and business owner. There was a gap in the market for simplified customer service and a demand for a quicker turnaround time.
Simplified process for setting up a business
For an entrepreneur it can be very overwhelming to start or buy a new or existing business. There are so many crucial decisions that need to be made from the beginning and new concepts to adapt to.
Puré Frooty Smoothie simplifies that drastically:
- Free-standing machines: The business model revolves around a free-standing vending machine which needs to be visited to refill and maintenance.
- No shop-fitting required: There is no need for shop fittings or a large work force. All that is required is an inside space for the machine with a power supply.
- Minimal human resources needed: In terms of a work force, you could either do it yourself or have one person to assist you. There is also a part time involvement where refill station teams can refill and maintain the machine.
- Cashless business: The business is completely cashless so there are no worries of a note jam, full cash canister or insufficient denomination rand values. More importantly the machines would do a higher turnover than an ordinary vending machine so safety of no cash is important.
- Easy tracking of stock and performance: A cloud-based system is linked to the point of sale which allows you to monitor your performance and stock from the back-office platform at any given time.
- Efficient handling of maintenance: With a live point of sale system, the business is linked to a software which monitors the operations of the machine. Should anything malfunction an immediate notification will be sent with a diagnostics report.
- Human error is eliminated: Everything is done with a computer which leaves little to no room for errors. It is self-order and very user friendly.
Related: SA Fast Food Franchising On The Rise
Why Will Customers Love It
Puré Frooty Smoothie offers a vending machine that can produce a delicious smoothie in forty seconds. An informative touch screen ordering panel which displays all the nutritional information of the smoothie ordered and has the current news and weather.
No time wasted for the consumer. In fact, it’s a learning session disguised as a waiting period. The machine has two wash cycles after every smoothie is made to be freshly prepared for the next smoothie, business hygiene is important.
Consumers live in the fast lane. We are looking for something quick and most times we would like to be healthier. With the hustle and bustle of today’s life every little bit helps. Puré Frooty Smoothie fills that gap in the market.
Interested in Becoming A Franchisee?
Visit our Franchise Info Page for everything you need to know about how to become information a Puré Frooty Smoothie Franchisee owner.
You can also call or write to us:
Phone / 012-942 6360
Email / email@example.com
Want to know more about this franchise? Watch the video below for more.
4 Top Tips To Find Your Best Franchise Opportunity
The President’s recent Job Summit highlighted the critical need to reduce unemployment. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.
Several years of strong sectoral growth combined with business opportunities that are often backed by an investor safety net is making franchising the top choice for many who want to own their own business. This assessment is based on the strong foundations of my own experience of establishing Cash Converters nearly a quarter century ago and the recent results of Franchise Association of South Africa (FASA) annual industry survey.
These figures show that the SA franchise industry has grown its turnover by 55 percent from R465 billion in 2014, when FASA conducted its first survey, to R721 billion in 2017. Alongside this, the sector’s contribution to South Africa’s GDP has expanded by 62 percent, from 9.7 percent in 2014 to 15.7 percent in 2017.
The President’s recent Job Summit highlighted the critical need to reduce unemployment and boost the national economy by growing business and stimulating job creation. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.
Franchising can be a win-win for franchisees. It enables you to make your dream of running your own business come true as well as contributing to providing much-needed new jobs.
These factors make franchising a particularly attractive option for those wishing to start their own business. But with 865 different franchise systems active in the country last year, the huge range of choice can be confusing.
To prevent analysis paralysis and ensure you can get set to make the most of franchising, I can offer four top tips for selecting the best franchise opportunity for you:
1. Choose a credible brand
As you shortlist franchisors that appeal to you, go beyond what they tell you about themselves and find out about what people are saying about them. Do social media searches to find out how consumers are reacting to the product or service offered, pricing and customer service. Your franchise fee should buy you a halo effect thanks to your franchisor’s good reputation. Too much negativity around the brand will affect the potential success of your franchise, from your ability to attract customers and the turnover and profit you can hope to generate.
2. Look for a proven business model
A worthwhile franchise shares with franchisees the intellectual property it has developed over the years. It has created and grown this business model over time, knocking off rough edges and fine-tuning systems for mistakes as they become apparent. Check the brand’s news history online as well as its own sales material. Be wary of any franchise that claims to be perfect or invincible.
Nobody is – so either it has something to hide or it is fooling itself. Either way, such a brand is not keeping its eyes open to navigate the brand and its franchisees through the changing fortunes of business.
Related: Thinking Of Going Into Franchising?
3. Check the support systems
Getting relationships and systems right is vital in business success. They have become even more important since we founded Cash Converters nearly 25 years ago because the volume of legal compliance has mushroomed. Make sure that the franchises you shortlist offer you support in coping with this and that those running the brand are in touch with what happens on the ground in the franchisees’ stores. At Cash Converters, for example, our front-end support staff are in stores every day and the directors devote three days each month to visiting stores. This ensures that our expertise is available to guide the franchisees through any business issues they face.
4. Follow the recipe
When you sign up with a franchisor, you receive access to its business model, including the “recipe” for running your franchise. This forms a kind of safety net so you do not need to reinvent a wheel when setting up your business. But you cannot complain that the business model does not work if you do not implement it. This is one of those times when you must follow the recipe to bake the cake successfully. If you are not the kind of person who wants to do that, then think again about whether franchising is for you.
Don’t Tread On Toes – Why Investing In A HIQ Franchise Will Offer You More Opportunities
Are you looking at investing in a tyre replacement and service industry? Look no further than the Hi-Q franchise.
Established in 1999, Hi-Q is a successful and diverse multi-product, multi-brand leader in the tyre replacement and service industry with a network of over 130 franchisees nationwide.
With the support of international tyre giant Goodyear, Hi-Q has established a solid reputation of ‘the one you can trust’, and the Hi-Q approach and philosophy is embedded in this. We have the trust of our customers, our network and our suppliers – that’s why you can trust us to take you and your business to the next level.
When you’re working with people’s safety, trust forms the most significant part of the equation
Hi-Q introduced the original and innovative TyreSurance initiative – the only aftermarket tyre damage guarantee product that backs the consumer no matter the brand of tyre. Each Hi-Q Franchise offers a broad range of brands within the different product and service categories that customers know they can trust, and at prices they can afford. Product and services include tyres, exhausts, shocks, batteries or brakes, wheel alignment or balancing, and a 10-point safety check.
We have identified areas of opportunity to extend our Franchise footprint growth. If you are looking to join a new franchise and you share in our values and vision, we would like to hear from you.
For further information on how to become a franchisee, call us on +27 11 394 3150.
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