I Don’t Need the Money
About one year ago, I started seeing a chiropractor whose office was much closer to me than the previous one I went to. Dr. Sam has been in business for nearly 30 years and is very passionate about what he does. His office is basic and doesn’t have all the fancy equipment so his overhead is low.
At the beginning of this year, I asked Dr. Sam how much it was going to cost for my session. Normally I wouldn’t do this, but the last chiropractor I went to raised the rates in the new year two years in a row so I wanted to be sure.
When I asked him if there was going to be an increase at some point, his response was; “No, I don’t need the money.” As someone who has been in business for a long time, I’m sure Dr. Sam has a good handle on his fixed and variable costs. With his low overhead, it is likely his profit margin is healthy while his client fee remains below the market average.
Dr. Sam knows his fans well and keeps his pricing low to meet the community he services. Those who want to be greeted by a receptionist, be treated on state-of-the-art equipment and visit a modern office environment are not his fans.
After my appointment, Dr. Sam’s statement got me thinking about the philosophy for small businesses of setting their prices. As business owners, we are in business to make money and tailor our products, services and environment, either via bricks-and-mortar or online, to meet the needs of our fans. It is important to cover costs and make a profit. This sparks a question I would like to throw your way:
What is a fair price to charge your fans beyond being financially sustainable?
I look forward to hearing your comments…
I like this post Jen.
So often people equate quality of service and success with outward appearances. That belief gets people caught in spiraling costs to keep up with the Joneses.
Keeping costs down and offering quality service keeps money stress under control. Think about what you’re spending your energy on.
In my work I see too much stress created from working hard to make the money to pay the bills for the stuff that was supposed to make a person happier. NOT!
A fair price is one that allows a business to be financially sustainable as well as have enough extra to build capital to withstand the normal, financial ups and downs usually encountered in business.
Good point Wayne. There needs to be a buffer zone in there for sure.
I think your Story about Dr. Sam is particularly timely. In the big picture, Dr. Sam is doing it right. The economic mess we are in is due to the desire for huge margins and wealth…and we’ve created a society whose values are just wonky.
Those of us at the top of the company make money off the backs of those at the ground level of that same company. When times get tough, employee hours are cut simply because it is an easy place to make a reduction. When times are tough, it seems to me the best response is to value the human resources even more and find other perhaps more challenging places to cut back.
We now have more awareness of the conditions in the Chinese manufacturing plants for Apple. I hear lots of people asking all kinds of questions about the ethics of the treatment of these factory workers….yet I hear no one ask why the prices of Apple computers (or any product manufactured in these conditions) still carry such a high retail price, when the manufacturing price must be quite low as to move these operations to China.
Off course the answer is profit. But the costs associated with this kind of profit are inestimable. And no one cares as we only think short term.
We all are complicit…we want to go to the shiny Chiropractors new office, we associate all these amenities with quality and assume the services are superior and our ego is happy.
We are in a very large mess. Somewhere, we need to make some ground level changes.
Sorry for the rant.
Marie – thanks for sharing your perspective. It is interesting to look at pricing and profit from many different angles.
Marie is correct, we are in a very large mess.
It is difficult to look at the world situation from a single small business perspective as we all contribute to the overall situation and can only have a small effect to improve things on our own.
A basic flaw in humanity is greed – we’ll take whatever our fans or the system will bare. All you need to do to prove the point is to watch people at a buffet table.
The communist system doesn’t work and apparently neither does capitalism. Include in that the world is a finite system, only so much air and water, it can not continue to grow without detriment to the environment.
An interesting book to read is called “Your money or your life’. Makes you think what do you really need. I switched from working for a large national company to a very small non-profit. Problem is our fans want to use our services for free and government funding and grants are drying up. No health benefits or pension – also small business challenges.
Jim – they say do what you love and the money will follow. But they don’t say it will follow you once you retire:( We definitely live in a different world in terms of government funding 20 years ago. This is a big consideration for many people. Thanks for your insight.