Management

 

Are You Willing to Sleep in Front of the Fire?

 

There is a story attributed to Ben Franklin that carries a profound message that you and your clients should heed.

It goes like this.

Ben had a printing business and was concerned about a competitor’s pricing policy. He invited his competitor around for dinner and placed a bowl of broth and a piece of bread on the table. In the room was a warm fire with a blanket next to it.

Ben said to his guest, “I can live on this bread and broth and have no trouble sleeping by the fire wrapped in that blanket. If you can live on less, you can starve me out. If you can’t, you had best reconsider your pricing.”

Issues of illegal price fixing aside, the lesson is clear. Unless your costs are lower than your competitors’ or you are willing to sleep in front of the fire, don’t compete on price.