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For a successful business, you need a viable business idea, the skills to make it work and the funding. Discover whether your idea has what it takes.

Forming your business correctly is essential to ensure you are protected and you comply with the rules. Learn how to set up your business.

It is likely you will need funding to start your business unless you have your own money. Discover some of the main sources of start up funding.

Businesses and individuals must account for and pay various taxes. Understand your tax obligations and how to file, account and pay any taxes you owe.

Businesses are required to comply with a wide range of business laws. We introduce the main rules and regulations you must comply with.

Learn why business planning is an essential exercise if your business is to start and grow successfully, attract funding or target new markets.

Marketing matters. It drives sales and helps promote your brand and products. Discover how to market your business and reach your target customers.

Some businesses need a high street location whilst others can be run from home. Understand the key factors from cost to location, size to security.

Your employees can your biggest asset. They can also be your biggest challenge. We explain how to recruitment and manage staff successfully.

It is likely your business could not function without some form of IT. Learn how to specify, buy, maintain and secure your business IT.

Few businesses manage the leap from start up to high-growth business. Learn what it takes to scale up and take your business to the next level.

Don't compete on price

When you are trying to bring in new business, it can be tempting to use price as an incentive. But cutting your prices is invariably a mistake, as Ben Dyer, CEO of Powered Now Invoicing App, explains

Competing on price often feels like such a natural path to follow - but for most small businesses, it is the road to ruin.

I don't mean that you should charge what you like. I simply mean that you shouldn't make price the main reason that you expect your company to be chosen over rivals. And you should absolutely never commit yourself to beat any price from any other supplier.

Where price-cutting makes sense

Competing on price makes sense when you have a cost advantage over your competitors. So a large national installer that had an exclusive distribution agreement with a window supplier whose windows were cheaper and better than the alternatives could compete effectively on price.

Historically, the big supermarkets have also been able to do this as they had their suppliers in such a vice-like grip that the pips were regularly squeaking.

But the vast majority of smaller businesses don't have a fundamental cost advantage over one another, so competing on price just lowers their margins.

This even become an issue for the "big four" supermarkets. Instead of competing with the corner shop, they now principally compete with each other and continue to emphasise price. The problem is that they also have to compete with Aldi and Lidl, and these guys actually have a cost advantage. No wonder the big four are doing so badly.

The problem with picky customers

How do you find dealing with customers that want to talk about nothing but price? Most businesses, to put it mildly, don't find them the easiest people to do business with. Those that are keen on a "deal" also tend to be the most unreasonable - they are often the most picky about every aspect of the work being done. These customer types know the price of everything, but the value of nothing. Why not let your competitors have them to themselves?

Pricing when you are starting out

Many people at the start-up stage try to undercut everyone because they don't have the confidence that they will get the job any other way. However, this is usually a mistake.

Of course, you can win on price by paying yourself (and any staff you have) a derisory salary. You can also cut every possible corner on the job. The first approach makes you poor immediately. The second makes you poor slightly later. That's after you drown in a sea of unpaid bills and even investigations from trading standards. What's more, you never get recommendations via word of mouth - and that's where a decent living lies.

What are the alternatives?

There are many alternatives to competing on price.

The first is to make quality your selling point. Matthew Stevenson of fast-growing The Landscape Company says: "If you are to win contracts when you are not the cheapest quote, you need to explain to people that if they get three quotes, they aren't likely to all be for the same job in terms of the quality of materials and workmanship. Best price isn't the same as best value."

To reinforce this point about quality, whenever you are discussing jobs with clients, make sure you demonstrate expertise without irritating them by being a know-it-all.

Another approach is to provide a level of customer service competitors can't match. One electrical contractor I know always responds to emergency call outs within one hour, no matter how trivial and whatever time and day they come in. This builds trust and often leads to follow-on work where price is not the prime consideration. I know of some companies that simply don't quote when they are in competition. They work hard to generate enough leads so that they can be choosy, and then do such a good job that they always get recommended.

Each company needs to find their own unique approach or specialisation that helps them avoid competing on price.

Start as you mean to go on

Competing on price is an incredibly easy route to poverty and probably, after bad workmanship, it is the largest cause of bankruptcies. Rip-off pricing won't work, but decent prices for good work should always be your aim.

Once started, it can be hard to stop competing with low pricing but once you manage it, you will never look back.

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