GoFaxer Blog

It’s easy when you’re starting a new business concept to want immediate sales, quickly. One of the easiest variables in the equation is your price. You know that if you lower your price, you’ll be able to ensure a higher number of sales.

But this strategy might not be the best option for your little startup. The bigger you are, the more margin you have to play with. But when you’re small and trying to grow, you have to generate enough cash to grow your infrastructure. Even choosing smart cost cutting solutions like fax to email are not going to be enough to compete financially.

This is why business analysts, who study the factors of successful new businesses agree: Compete on service or quality, not price.

As a small business, you might have less wiggle room on price, but because you’re small you can control the quality of your product much easier. You can always provide better service than your competitors. But don’t think you can go up against the big players and compete on price.

Unless you have a small business that is almost instantly profitable, like a recent piece I wrote about Snap Fitness, you’re really best off keeping your prices slightly higher and guaranteeing a superior product to your consumers.

I recently read an interesting article at Businessweek.com by John Tozzi. He tackles the issues of start-ups that are growing and need to build their infrastructure. Many businesses have a hard time through these growing pains. Suddenly, the concern is no longer your marketing concepts or products. You’re now concerned with infrastructure. You’re concerned about building a team that can do their jobs without you having to look over their shoulder every five minutes. It’s about building a system of controls.

Tozzi says:

“For some entrepreneurs, understanding how their roles change in second-stage companies is the biggest challenge. ‘What you have to learn is how to effectively delegate, how to effectively motivate, how to instill trust [in employees] and to trust them,’ says Larry Kooiker, president of Holland (Mich.)-based Agritek.”

Of course, the big challenge is to make the necessary investments in infrastructure, without the organization becoming a beast that takes over everything. You still want the speed and agility that you enjoyed in your early days of business ownership.

I think the key is making smart decision about your expanding infrastructure. You want to choose services like fax to email, which make for a more efficient system, and don’t create a useless bureaucracy.