"The Hook-Up" Is The Death of Your Small Business"
Whether it is a car, a house or a pack of spearmint gum we all like to get a discount or a deal on what we purchase. The ultimate deal of all deals is that special four-lettered word, FREE! We like getting things for free so much that we have even given it a title of its own, “The Hook-up”.
What is “The Hook-up” Exactly?
The “Hook-up” is when you get a product or service at an extremely discounted rate or for free. If you just bought the latest iPhone for $10, my friend, you got “The Hook-up”! Congratulations! However, if you are a small business owner that constantly gives away services and products at a discounted rate, R.I.P. to your small business.
How The Hook-up Kills Your Small Business
Having a heart of gold and is a good trait, but giving away all of your treasures is an easy way to bury your business 6 feet under. If you are a barber who always gives away free haircuts, that is what you will be most known for. Not the skill or the quality of service, but the free haircuts will send dozens of clients your way that will be expecting a discounted or free haircut.
When you made your business plan (I highly suggest you make one of these) you made some financial projections. In those projections, you anticipated that you the number of haircuts you provide on a monthly basis and the amount you would charge per service.
Guess what? Free services and daily discounts were not a part of those projections. So, guess what else? You may not be able to pay for your equipment, rental of your lease or chair at the shop, and you will not be able to pay the barber (that’s you my friend).
This will have a domino effect of the economic development of your community because if you can’t afford to pay yourself, you can’t afford to buy from the donut shop across the street.
What To Do Instead
Instead of hooking everyone up with free services, there are tons of other ways you can give back. You can select a charity or an organization in your community that you give to annually to support their cause.
If you like being more hands-on, you can establish 1-2 free or discounted service days per year to your community. You can also host an event or give an annual scholarship to a local student. Don’t give away your hard work because trust me, most people will find a way to pay for the things that are important to them.
This Goes Out To All The Deal Chasers, The Deal Chasers’ Mamas, and Mamas' Mamas
I would like to encourage you to not ask for special prices and discounts at small businesses. You think that the business owner has it to spare because their name is on the sign out front. Right? Exactly WRONG!
The business owner had to sacrifice time, money and other resources to maintain the proper licenses, certifications, insurances and leases to name few. I know, I know, you’re probably thinking that all businesses in your community get grants and free money. You’re exactly wrong again. Many small business have taken out loans, taken away from their personal checking and savings, and borrowed from Peter to pay Paul to start their small business. So, do them a favor and don’t make them feel uncomfortable by asking for the hook-up.
Your Small Business Supports the Community and YOU!
Being a small business owner is a very honorable position and you may feel that it is your job to save the community. However, you must remember that one of the objectives of a small business is to make profit so that you can financially support yourself and your family. Don’t allow “The Hook-up” to commit a financial homicide on your small business.