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Competitive Pricing Can Hurt Small Business

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For many young businesses hungry for customers and competing in crowded markets, the first impulse is to lower costs to compete with bigger brands. Beating your largest competitors on price is a great way to gain customers, but if you obtain customers at price points that are unsustainable, they will not be with you and your company for the long haul. Your prices will have to increase, potentially driving away all of those customers you brought in. And if you do not increase prices, you might just find your business losing money with every new customer.

Finding funding for small business can be difficult. Believe it or not generating income is the best way to fund your business. Even as a sensible merchant cash advance allows you to bridge the gaps in your budgets, you need to have a winning business with profits to stay afloat. This is why keeping prices low to acquire customers is not as important as finding a price point and business model that is manageable and can help you find a sustainable customer base.

Test your pricing to ensure that you start from a place where profit is possible. It is the safest way to keep up small business funding for the long haul.

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