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Entrepreneur is a Lice Exterminator

http://www.louseynitpickers.com/

For M. Evan Parker and Frank Campos, business is pretty lousy these days — and that’s just fine.

The firm fields an average of 10 calls a day, some days as many as 25. Most are direct referrals from past customers.

“People don’t tend to book us in advance,” Parker said. “By the time they call, their child’s been sent home from school and they want treatment that day.”

Accommodating as many as 90 itchy customers a month can keep Campos, the firm’s chief nit-picker, another full-timer and three part-time employees busy from 7 a.m. until 10 p.m., shuttling to homes across the Los Angeles area. The two men, who have known each other for a couple of years, found their nit niche after years in the hair care business.
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Low prices are no guarantee of profits

 Whenever I ask first-time entrepreneurs what’s going to make their businesses different from the competition, many of them say, “We’re going to be cheaper.”

They think they can succeed with a strategy of undercutting their competition’s prices for products or services. Low prices, they assume, will generate sufficient sales to more than make up for smaller profits. “What I lose in margins, I’ll make up in volume.”After all, they see tons of advertisements for big companies that only seem to emphasize low prices. And they know that they comparison shop before they make purchases. So they think that a strategy of low prices is the path to success. But what’s good strategy for a few giant retailers or airlines is extremely risky business for most small companies — and most big companies as well.

Competing on price is risky. Low prices mean narrow profit margins, and that means less cash. With a small financial cushion, you’re vulnerable with every slight increase in costs. The landlord raises your rent 5 percent? That may be your entire year’s profit.

See Full Article http://www.theithacajournal.com/apps/pbcs.dll/article?AID=/20070116/LIFESTYLE06/701160306