Page 107 - Business Plans that Work A Guide for Small Business

98 • Business Plans that Work

Based upon the
premium price strategy, When opening on a campus we must be aggressive in
Lazybones identifies some acquiring customers and dedicate ourselves to their
marketing strategies that
might entice students to satisfaction so that they will consistently endorse us to
try the service. Notice how their friends. Our pricing will be at a premium level, but we
they are using social institu-
tions to get at a student’s need to be very creative and aggressive about discounting
desire to do what their
friends are doing. during the first year of operations. Offering group specials
aimed at getting fraternities and sororities to try us out,
and offering giveaways as part of promotional advertising are
effective techniques. We also need to be extremely flexible and
accommodating to customer requests in order to remove
their reluctance to try our service.
Our service will be largely sold in the form of semester
packages with pound limits attached (10, 15, 20, or 25 pounds per week). This is
also beneficial to our cash flow. We will sell blocks of pounds at discounted rates
and also offer straight laundry by the pound (Exhibit 4.1).
Storage is priced by the piece—flat fees for typical items like boxes and plastic
bins—and charges per cubic inch for items that vary in size like furniture. All prices
are for the pickup and the storage of the items, although we do add a delivery fee
of $25 for customers who do not schedule their delivery by midsummer. Typical
charges are around $40 for a box, and the customer average for an order is around
$250. We do not sell “packages” to students with certain numbers of boxes
included but rather take whatever items they end up with for storage.
This exhibit nicely
summarizes Lazybones
pricing. If Lazybones added
a column with the expected
percentage of customers
choosing each package, it
would help them refine
their revenue projections.
This is great comparable
data to share with Exhibit 4.1 Laundry Pricing
franchisees.
Package Price Extra Pounds
Semester Laundry Packages
10 lb per week $229.00 $1.59
15 lb per week $299.00 $1.59
20 lb per week $369.00 $1.59
25 lb per week $429.00 $1.59
Block of 100 lb $109.00 $1.59
Block of 200 lb $198.00 $1.59
Block of 300 lb $367.00 $1.59
Laundry by the pound $1.79