Vancouver Business Journal

Sun04202014

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Trust, Park Service fail to reach agreement on Pearson Air Museum

Trust, Park Service fail to reach agreement on Pearson Air Museum

Several months after having entered into formal mediation talks to discuss issue...

Riverview Community Bank celebrates regulatory decision

Riverview Community Bank celebrates regulatory decision

Officials at Riverview Community Bank are moving forward with confidence knowing...

Commercial development: Building for tomorrow

Commercial development: Building for tomorrow

If commercial developers feel like circus performers walking a tightrope, there ...

 Business Growth Award finalists announced

Business Growth Award finalists announced

14 businesses have been named finalists for the Vancouver Business Journal's 201...

Is Food Processing part of Port “Comprehensive Scheme”?

Is Food Processing part of Port “Comprehensive Scheme”?

The leaders of a Clark County food processing company will bring their efforts t...

Developers cautious but developing

Developers cautious but developing

Although the Great Recession is behind us, many businesses and individuals are s...

Design & Construction

Commercial development: Building for tomorrow

Commercial development: Building for tomorrow

If commercial developers feel like circus performers walking a tightrope, there is good reason.

Limited financing, escalating regulatory and raw material costs, and still-low property valuations make penciling out a project difficult. And yet, workforce trends and emerging technologies demand designs that look to the future.

Build to the budget

According to Ron Frederiksen, president of RSV Bui...

Innovation & Manufacturing

Southwest Washington keeps its focus on manufacturing

Southwest Washington keeps its focus on manufacturing

Southwest Washington boasts a number of regional factors that are beneficial to the local economy. Among them are access to clean water, affordable power and a skilled workforce. These factors have continued to drive the local manufacturing industry in 2014 – an industry that was one of the first to convincingly move forward out of the recession.

“Advanced manufacturing aligns with both our Orego...

News Briefs

CREDC seeks health care startups to participate in “Shark Tank”

The Columbia River Economic Development Council (CREDC) is accepting applications from startups related to the health care sector interested in participating in Clark County PubTalk’s annual business pitch competition on Tuesday, June 17.

Spotlight

Audio Fox: A sound solution

Audio Fox: A sound solution

Like a lot of small businesses, Vancouver-based Sound Product Solutions started with a problem. Several years into retirement, Rex Clark was experiencing hearing loss – and he wasn’t the only one affected by that change.

“We had some disagreements, me and my wife, about where the volume should be on the TV,” said Rex. He remembered similar struggles between his own parents, but the best solution ...

Common Business Questions

Staying competitive in the market can prove profitable

Janet A. Harte
Small Business Development Center

Q: Sales are growing but I am not making any money. How do I improve my profit?

A: First, take a look at your selling price and, second, analyze your expenses. A selling price that is too low or expenses that are disproportionately high mean less money for you.

Staying competitive in the market can prove profitable

Janet A. Harte
Small Business Development Center

Q: Sales are growing but I am not making any money. How do I improve my profit?

A: First, take a look at your selling price and, second, analyze your expenses. A selling price that is too low or expenses that are disproportionately high mean less money for you.

Q: What do I need to know about setting prices?

A: Two factors that affect price are competition and cost. If you are selling comparable products or services at a price lower than your competition, then you will attract market share. However, keeping market share depends on how your customers perceive value. Normally, low price means you can’t afford to offer other things like a convenient, attractive location and excellent service. A low price strategy means a "bare bones" cost strategy.

Q: What if the prices I use are similar to my competitors’ prices?

A: If prices are competitive, then your ability to improve profits means lowering costs to give you sufficient profit margin. Begin by analyzing the gross profit margin – selling price minus cost of sales. Gross profit must cover your overhead plus profit. To see if your costs are appropriate, compare them with industry standards. Good resources are the Risk Management Association’s "Annual Statement Studies 2006" and Dun and Bradstreet’s "Industry Norms and Key Business Ratios." They are available at the Fort Vancouver Regional Library. If you belong to a trade organization, look for statistics on appropriate cost of sales in your industry.

Q: Assuming the gross profit margin is OK, what about overhead?

A: First, make sure you are recording all of your overhead expenses. Overhead costs are those you have to pay whether you make a sale or not. Shop for the best deals on insurance, telephone plans, advertising and travel, as well as on industry-specific costs. Common large overhead expenses are leases for space and/or equipment. Negotiate the lowest cost per month by extending the terms or assuming the costs of improvements. Some expenses such as electricity, water, fuel, office supplies, and so on can be minimized by avoiding waste. Pay close attention to overhead costs and profit margin goals. Remember, sales must cover cost of sales and overhead, and provide profit to reinvest or distribute.

Q: Is there anything else I should do?

A: The best way to be competitive is to meet the needs of your customers. This means identifying opportunities to provide more or better products and services as customer needs evolve and change. Keep an eye on new products and trends, suppliers and competitors. However, to be profitable, you must adjust prices as necessary and always look for opportunities to reduce costs.

Visit your local library to research market trends or contact relevant trade associations. Visit competitors regularly to compare your business with theirs and assess your competitive advantage. Talk to your accountant or a business consultant about managing your finances. Your industry and market environment, your customers and your ability to manage your business all impact your goal of higher profits.

Janet A. Harte is a certified business advisor and center director of the Washington State University Small Business Development Center for Southwest Washington. The SBDC offers free, confidential business management advice to small and mid-sized businesses. It is a partnership program with the U.S. Small Business Administration. For questions or to make an appointment, call 360-260-6372 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. . For more information, visit www.wsbdc.org.

Opinion

Focus Column

Innovating innovation

Innovating innovation

If you want to attract innovation, you need to be innovative. The Clark County Economic Development plan, which guides t...

You can thrive without reinventing the wheel

You can thrive without reinventing the wheel

Every day the media bombards us with headlines of doomsday for American manufacturers. We read how competition is stiff,...

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