24 June 2008

The Cost of Goods

Over the past few years we have seen everything around us go up in price.

This continues to be the case, from our basic office supplies and contractor rates to our suppliers rates. A number of months ago, we also had a 75% increase in our rent.

Please don't mistake this as just being whiny - there is no complaint here, just a realization. We need to adapt.

Businesses must adapt to change, much the same way coyotes have learned to adapt to their new urban territories. Many species have died off or have been moved away from their natural habitat because of human development and a changing environment - not the coyote, it has learned to roll with the punches, change with the changes and create a new life in a new environment.

Business leaders can learn a lot from the way a coyote conducts his business.

Right from the beginning, our plan was to serve the many companies that could not afford the big ad agencies rates. No compromise in quality or talent meant finding other ways to deliver high quality work without the high prices. One way this was achieved was through the use of industrial office space vs. the traditional and trendy beltline district. Another way to reduce these costs has been the absence of account executives - at our shop you deal directly with the people that make things happen.

Our business is growing and in order to keep up with the demand for our services, we need to adapt. Over the next 60 days we will have to find more space and hire 2 or 3 more people, it's very exciting. In order to do this, we will have to raise our rates, we will still be well below the industry average. For some of our clients, an increase may be too much, and we are at risk of losing these customers. On the other side of things, we have a handful of customers that don't even know what our rates are, nor do they care - the end price is what matters and how we get there is of no consequence.

What we do have going for us are results. And, results are powerful... when you can demonstrate results, the costs typically don't matter. Luckily, we are in the business of delivering results.

It's been 5 years since we had our last price increase, and with the end of our fiscal year we will say goodbye to the old prices and hello to the new.

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