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Moving away from the myth that black owned means cheap or free

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DISCUSSIONSMoving away from the myth that black owned means cheap or free

For a while, there has been a general misconception that black owned means cheap or free. As the black pound gets stronger and number of UK black owned businesses grow, we need to move away from the myth that black owned means cheap.

Pricing is a highly complex area for most black owned businesses. When a business owner gets it right, sales and profit flow, When a business owner gets it wrong, sales may continue to flow but profit can be lost and cash flow depleted. In the worse case scenario, it could cost you your business. The problem is more acute for startups and SMEs.

So how does a new or small black owned business get it right? What are the methods that can be deployed to help increase the likelihood of success?

Setting your pricing strategy: The important questions

When considering price planning, it’s important for black owned business to think more broadly than price. Let’s consider the questions which are important to consider before you decide on the right pricing strategy:

  1. Are you creating a new sector? Will you have a captive audience all to yourself?
  2. Who are your target audience? Are they price sensitive based on the their collective circumstances?
  3. Which products do they currently use or might they compare your offering with?
  4. What advantages/benefits do you offer over your rivals?
  5. Do consumers value those advantages and see them as worth changing for?
  6. Where will they be able to purchase the product or service?
  7. Who are your competitors?
  8. What price do they charge?
  9. What differences do you offer in comparison with the competition?
  10. Is the market growing or is it a well-established static market?
  11. Is purchase likely to be repeat or a one off?

BLACK BUSINESSES ARE NOT OVERPRICED. YOU ARE JUST CHEAP.

As an entrepreneur and supporter of black startup businesses, there is nothing more frustrating than seeing individuals complain about pricing. If you are one of these people, your thought process needs adjusting as you fall into one of the following:-

You don’t understand economies of scale

Most Black business in their first few years of trading do not get to benefit from economies of scale. Whilst this is not an excuse for ridiculous profiteering, it is important to remember if a black business is selling products exclusively to a black audience, they are selling to a market that makes up less than 3% of the population. If the product is aimed at black women for example, that percentage halves to 1.5% of the population. Simple maths.

You have never setup your own business

A business owner can easily spot someone who has never run a business. There are five pricing models a business/business owner needs to use depending on market conditions. These pricing models include:-

  • Competition-based pricing
  • Cost-plus pricing
  • Dynamic pricing
  • Penetration pricing
  • Price skimming.

Without prior knowledge, labelling a black business as too expensive is damaging to say the least. What needs to be said is you cannot afford the services or the product. It is beyond your means. Your budget is limited. Set your expectations accordingly.

Black businesses are not overpriced. You are just cheap.

You are being stereotypical for the sake of it

Any form of sweeping statement that pools all black businesses together is a stereotypical comment. What’s worse is when it comes from our own community. It is best to hold them thoughts in before airing them. The year is 2021 and any talks of ‘crabs in a barrel’ or ‘black people are their worst enemies’ needs to die a painful death. This leads on to my next point…

You have been conditioned well

Most people who have been conditioned into a negative way of thinking don’t realise they are being negative. That is the beauty of the conditioning. Read some positive mindset books. Then read some more. Then a little more and hopefully the of conditioning might wear off .

You are simply a fool

Name calling is the last resort when logic can’t be applied in this situation. If you still maintain your position and deny the four points above, you are a fool. It is as simple as that. If you want to play the role of a fool, I was taught, ‘never argue with a fool… because people from a distance can’t tell who is who‘.

Take your pick. As harsh as this seems, if you hold the view that supporting black businesses is a problem, keep your money in your pocket. Chances are you will not buy again and will only complain about the product/service. This presents the unknowing business owner with a double whammy of an unhappy and vocal complainer. You will surely put off future clients/customers because of your ignorance.

Black businesses are not overpriced. You are just cheap.

In conclusion, inexperience of running a business may have lead some to this belief and you may choose to double down but it is worthwhile remembering, you may want to start a business some day and you will come up against the same hurdles. The last thing you will want is someone with a budget for a Ford Fiesta complaining about the cost of your Ferrari.

Founding Member of Blown Businesses. Passionate about the growth and success of black owned businesses in the UK. Lover of all things with four wheels and fast. Also Contributing Editor for TrendLife Magazine, a refreshingly bold magazine that brings the best lifestyle and entertainment news to Beds, Herts & Bucks.

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