How’s that for a bucket a cold, harsh reality thrown right in your face? Truer words were never spoken, though.
A man decided to open a steak place. His father used to be in the restaurant business, so he asked him for some advice.
The father said, “Here’s the most important choice you have to make: either be the absolute cheapest steak place in town, or be the absolute best. If you’re somewhere in the middle, you’ll get eaten alive from both ends.”
These days, I think you really only have one choice: be the best and never, ever compete on price.
One of my all-time favorite talk-radio personalities is Bruce Williams, now retired. In his book, In Business For Yourself, he said the number one mistake he sees small business owners make is setting their prices too low.
So many entrepreneurs start a business thinking they’ll undercut the competition, and then make it up in volume. When the volume doesn’t materialize, they’re sunk.
You see this on eBay all the time, too. Somebody has a source where they can get widgets for $1 and sell them for $5. Then somebody tracks down the same source and will gladly sell it for $4. Somebody else comes along asking only $3. It’s a race to the bottom, and pretty soon there’s no incentive for anybody to sell the widget because there’s no margin in it.
Small retail businesses are always lamenting having to compete with Wal-Mart. If you ever find yourself in that predicament, make the choice to never compete on price.
As Dan Kennedy advises, pick a battle you can win. You’re never going to beat Wal-Mart on price, so compete in a different arena. What can you offer that Wal-Mart can’t?
Can you provide better, more personalized service? If you’re selling the same physical product as Wal-Mart, can you bundle it with value-added services to make your offering superior?
Get creative and — I’ll say it again just to hammer it home — make the choice to never, ever compete on price.
All you have is right now. You can’t do anything to rewrite the past, and the only thing you can do to have any affect on the future is to take some sort of action right here, right now.
I’m sure you’ve seen a giant mosaic hanging on a wall of a museum, or maybe a hotel — thousands of small, colored tiles that, together, form a complete image.
That’s your life — a “mosaic of nows.” The choices you make in the now give each little tile its shape and color. What kind of picture do you want to create?
You make your choices, then your choices make you.— Jim Rohn