Lubanga (Name not real) wanted a machine to use on his small farm and he approached an engineer who came highly recommended by a friend. After making an assessment of the work, the Engineer quoted UGX 1,500,000/= (One and a half million shillings). However, Lubanga opted to bargain and eventually the two parties settled for a cost price of UGX 750,000/= (Seven hundred and fifty thousand shillings).
Having agreed on a time frame for the works to be executed, Lubanga fully paid up and waited for the delivery of his machine. It eventually arrived but failed to work. That is when the problems begun. One excuse after another was availed by the engineer eventually leading to a frustrated Lubanga. The cat and mouse game went on for more than six months until Lubanga decided to let the cat out of the bag and publicly shame the Engineer on a WhatsApp group.
Upon arbitration, the Engineer first gave the excuse of low electricity as the reason for the machine failing to work. When pinned further, he confessed that the low pay would not give him room to make adjustments on the machine design. Hence, he was stuck with a non functional client’s machine.
As Small Business owners, we are usually too desperate to get business and impress at the same time that we fail to make objective assessments. Since we never usually undertake thorough analysis of our cost structures, sometimes our pricing is temperamental and largely based upon the circumstances we are going through. I know of some artisans who will charge you twice the going rate for a particular job simply because they have to clear a LandLord’s debt.
A Basket Weaver in Adjumani District – Northern Uganda
Since every service or product to be offered has overhead costs, it is always crucial to make a proper breakdown of the costs involved before committing oneself to a job. Sometimes the temporal smile you put on a customer due to the low price quoted could turn out to be the worst decision you ever made. Imagine the effect of an angry customer maligning you among your network of friends and associates who were considering the use of your services?
There is this tendency we have sometimes of trying to offer a product or service that fits within the budget of the customer. This isn’t such a bad idea but it shouldn’t be stretched too far. Often times, you can quickly sense a customer who wants to get a Mercedes Benz at the cost of a Toyota. Be very wary of such because if you accept their bait, the end result might bot be good for both parties. That is what must have happened to Lubanga. Bargaining is my favourite pass time but if someone is ready to discount a product by 50%, I would be very scared and most likely not partake of that transaction. It automatically means that there shall be some form of compromise which could affect the customer experience am looking for.
I know there are situations that arise, you have offie rent pending, multiple customers are yet to pay up for services already provided, you have a wage bill to sort out, your own livelihood is at stake and hardly have enough to transport yourself from home to work and back, your child has been sent away from school due to lack of school fees and so on and so forth. With all this baggage, you do not really want to let this money go. My brother/sister, I advise that you spend more time trying to convince the customer to embrace a payment structure that will enable you break even at worst. Alternatively, have then scale down their expectations and ensure that whatever is agreed upon is written down for the record.
In case no agreement can be reached, do not compromise. Say NO to that job. If it is the exposure you’re looking for, then probably offer a free service and make it clear to the customer.
Saying yes all the time and failing to live up to the promises made only serves the purpose of making you look greedy. Reputation is key.
Go say NO. You wont die.
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The Wire Perspective 