No Guilt

I can’t help but comment on it, although it will surely result in at least one nastygram e-mail from someone with an “opinion” they gotta share. Save it, Karen. This epic stupidity needs to be called out…and yes, there’s a business lesson in this, and it’s a good one.

Recently, Kamala Harris revealed her idiotic plan to end price gouging at grocery stores, clearly in an effort to win votes from people who don’t understand business economics or how a free market works.

In case you are unaware, grocery stores are some of the lowest-margin businesses operating today. Typically, a grocery store will earn only about 1.6% net profit. Think about that for a minute – a store can produce $1 million in sales and net only $16,000. And let’s not forget the difficulty and risk of running a grocery store and the massive investment it takes to open one. 

Recently, the Whole Foods store near my house had empty shelves because an employee accidentally flipped the wrong switch in the back, turning off all the freezers, forcing them to throw away thousands of dollars in products. No joke. Employee and deliveryman theft along with shoplifting, called “shrinkage,” is roughly 3% to 4%, which is DOUBLE the profit of the business owner, except those thieves have none of the risk, overhead or work involved in earning it. Then there’s the difficulty of long hours, running a 24/7 operation, dealing with the general public, legal risks and high employee turnover, given most stores are run by lower-wage workers.

Further, grocery stores manufacture only a small portion of the goods sold in the store. The vast majority is resold, which means they have to mark up the items above the cost they paid to stock it. Therefore, if egg farmers raise their prices, the grocery store simply passes on that cost of goods sold. How is Harris going to regulate that? Is EVERY food supplier under the same scrutiny? Is it okay to mark up a “luxury” food item like bottled water (remember, folks, as kids we drank from a garden hose), but not vegetables? And what exactly is “too much” profit anyway?

In the past 4 years, the cost of everything has gone up, NOT because the “fat cats” running the stores are making 70% profits, but because of the economy we are in. This is just another “evil rich” hot button they’re pushing on because it’s an easy sell to people struggling financially who think wealth is a zerosum game controlled by a tiny minority of people who prevent them from getting ahead. 

As a business owner, you cannot let this type of thinking seep into your mindset or it will severely hinder you in more ways than one. 

Let me give you this little reminder in case you’ve forgotten: the REASON to start, own and grow a business is TO MAKE A PROFIT. Don’t let anyone confuse you, intimidate you or deter you from that goal. There is NO shame in making a lot of money, because you have to earn it. That’s how capitalism works. Purchases are voluntary, consumers have choices, and competition and monopoly laws keeps us all in check. 

I’ve spent a lot of time working with business owners (MSPs) to stiffen their spine and get them to raise their prices and charge appropriately for the services they’re delivering. Often they earn a lot less than they could, mostly due to fear and guilt (sometimes a little laziness). I have to remind them that not charging enough and suppressing profits is not the noble cause they think it is, earning them a cooler seat in the afterlife. A company that is barely surviving can’t pay its employees more or offer benefits. It can’t invest in training, tools and other resources to better serve its customers. And it certainly doesn’t increase owner happiness when you’re working your tail off 24/7/365 yet barely making ends meet. 

If you voluntarily take on the cost, risk, workload and stress of starting and growing a business, taking care of your customers and your employees, delivering exceptional value, paying your taxes and delivering a much-needed service, you DESERVE every dime of profit you make, period. Never forget it, and you should damned sure never apologize for it either.

If you’re ready to stop apologizing for making a profit and want to learn how to charge what you’re worth, join me at the MSP Marketing Roadshow. We’ll dive into the strategies that successful MSPs are using to grow their revenue. It’s time to stand up for your business, your values and your profits. Don’t miss out—your future success depends on it.

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ABOUT THE AUTHOR
There’s no doubt about it: Robin Robins has helped more MSPs and IT services companies to grow and prosper, liberating them from stagnation, frustration, drudgery and low incomes. For over 20 years, Robin has been showing MSPs and IT services firms how to implement marketing plans that attract higher-quality clients, lock in recurring revenue streams and secure high-profit contracts. Her methods have been used by over 10,000 IT services firms around the world, from start-ups to multimillion-dollar MSPs. For more information and a FREE copy of The MSP’s Ultimate Guide To IT Services Marketing And Lead Generation, go to https://www.technologymarketingtoolkit.com

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