In today’s world, each one us dreams of being an entrepreneur and starting up something that we are passionate about. It’s all about making a difference in the world of business and solving the pain areas of the target audience through our offerings of products and services.
Entrepreneurship requires a thorough thought process, radical thinking, market know-how, and a strategic plan that is clear and crisp. Also, the vision and mission need to be divided as per the short term and long term goals and objectives.
However, easy and simple it may sound on a piece of paper or the powerpoint presentation slides, there are various Barriers to Entrepreneurship that each of the entrepreneurs taking the risk has to face and get through. and we also learn
Now, what is that you might wonder?
The money-back-guarantee is a guarantee that is provided on some of the products of a particular site.
This guarantee ensures that the people who end up returning the product that they buy will end up getting their money back if they are not satisfied with the products.
In this article, we will be diving deep into the world of Money Back Guarantee and try to understand the concepts associated with it. We will also understand the pros and cons associated with Money Back Guarantee, along with the economics related to this concept. So, let us get started right now-
Top 12 Barriers to Entrepreneurship
We are all bustling with ideas that are unique and can make for an amazing business start-up. But no matter how good your idea is, you will always need stable finances and funding from the investors to begin the process and take the first step towards your journey of entrepreneurship.
And getting a sound financial investment or funding can be one of the biggest Barriers to Entrepreneurship as many of banks, private investors, angel investors, and organizations find it quite difficult to believe in the start-up ideas owing to the risk of failure and losing their money.
#2 Fear of not to be a success
We all go through the fear of failure. And if the fear is associated with the risks and stakes taken in the stream of business and entrepreneurship, the level of fear elevates.
There is a fear if we are on the right track, is the idea worthwhile, will there be profit, will I find investors, and various such fears and tensions act as the Barriers to Entrepreneurship.
#3 No strategic plan in place
Lack of proper planning and strategy in place is one of the most common Barriers to Entrepreneurship. Many of us think to build a business out of a hobby without having any sort of long term and short term vision and plan in mind.
Running a fully-fledged business or being an entrepreneur requires a huge amount of skill set, passion for excelling, strategic vision, the mission to accomplish the goals, market research, and a lot more.
Right from the target market, finances, human resources, to a proper strategic plan is required to build a successful business or a brand in the market.
#4 Human resource issues
Entrepreneurs cannot handle and run a business alone by themselves. We require the support of human resource to carve a niche in the market.
Employees with the required knowledge, expertise, and experience are needed for the efficiency of the business processes and high levels of productivity.
First of all, it is quite difficult to find the employees that share the same vision and wavelength of the business. Plus paying a hefty annual or even a monthly retainer income is a problem of the start up’s as the finances at hand are always limited, and the overheads and expenses are also to be taken care of.
And secondly, it is also difficult to manage human resources as each of us work with a different mindset and perspective. Hence, human resources and employees can be as one of the Barriers to Entrepreneurship.
#5 Stringent rules and regulations of the market
It is not very easy for entrepreneurs to enter the new market as there are quite many rules and regulations imposed by the government authorities.
Plus there are various laws and compliances to be adhered to such as taxation, environmental regulations, licenses, property rights, and much more than act as the Barriers to Entrepreneurship.
Some of the countries have many corrupt officials that act as a hindrance for the new entrepreneurs and start-up brands to start or expand their business in the new market. And if the brand is planning to expand its business operations in any of the foreign countries, it gets even more difficult.
#6 Fewer opportunities
Even though there is a lot of talent pool in the market with the aspiring entrepreneurs buzzing with the ideas, but the opportunities presented to them are quite less and fewer.
Reasons such as nepotism and corruption act as the Barriers to Entrepreneurship with not many vital and lucrative opportunities.
#7 Lack of capacity
Even if there are opportunities presented to the aspiring entrepreneurs, there is a lack of capacity in some them to embrace the opportunities with open arms. The reasons can vary from lack of knowledge, lack of education, lack of willingness, lack of strategic knowledge, and cultural hindrances amongst others; but the factor of motivation and zeal gets missing.
To start a new business venture amidst all the risks and market-related issues, it requires a lot of hard work, passion, and high capacity to handle all of it.
#8 Less market experience
The experts always mention that one should never rush in setting up a business. It is quite necessary to gain a relative amount of work experience by working in the industry domain or sector of choice and as per the education levels. It also helps to sharpen the required expertise and find the ground in the career graph.
Once the person is ready to take risks and have a relative amount of market exposure, he is ready to take the entrepreneurial plunge.
#9 Lack of risk-taking capacity
It is always said that entrepreneurs never sail in safe waters and are never confined to their comfort zones. Lack of risk-taking capacity is the psychological mindset and perspective towards the business and acts as one of the major Barriers to Entrepreneurship.
The budding entrepreneur has to have a structured and organized approach towards the various business elements and should risks rather than averting them.
#10 Corrupt business situations
As mentioned earlier, if the business situations and the environment are not very supportive and corrupt for the young and aspiring entrepreneurs, it acts as one of the top Barriers to Entrepreneurship.
Bribing, rampant corruption, unfriendly ties of government with other nations, inconsistent laws, stringent compliances, and enforcing regulations that are unhealthy and negative in their approach hamper the growth of businesses in the country.
Russia is one of the examples of having an unhealthy and unsupportive business environment.
#11 Inadequate training
With no proper education, development, training, entrepreneurial skills, and technical know-how acts as the Barriers to Entrepreneurship.
#12 Lack of practical knowledge
Having a strong educational background is just not enough to pursue business as it requires practical knowledge as well to stay relevant amidst the various market cycles. And many entrepreneurs lack practical knowledge.
Understanding the Money Back Guarantee Method
Are you able to guarantee the work that you do or the product that you create?
Can you provide some surety on the products that you are trying to sell?
When people are trying to buy the products that you have, the money-back guarantee can be some of the main benefits for sure. It lets people know how confident you are about the product of yours in the first place.
Many different companies actually have the money-back guarantee on the products that they are trying to sell in the best way. This is something that has helped them in increasing their sales for a very long period. People seem to trust the products more that have a proper money-back guarantee.
However, it is essential to know that every method has some strengths and weaknesses. People need to know about that. This is what we are going to discuss right now. So, make sure that you are listening carefully.
In the next section, we are going to talk about the pros and cons that one might get from the fantastic money-back guarantee.
The Advantages of Providing Money Back Guarantee
Here we are going to talk about some of the common benefits that one might get when they offer the people with a money-back guarantee on the products that they have.
- When people provide a money-back guarantee, there is no barrier to the entire process of sales. So, that means it would be effortless to make a sale. This is something that can turn a browser into the customer or buyer.
- It provides you with a competitive edge. Many companies might be offering the same product that you do. However, since people tend to trust the products more that have a money-back guarantee, we are pretty sure that they are going to provide you with more benefits than your competition.
- With the help of a money-back guarantee, you can improve the relationship that you have with the clients or customers. In case they don’t like the product, they can get the full price in the best way. This will put the business of yours in their excellent books.
- It helps in the building of trust in the best way. You can gain the confidence of the customers which can help in increasing the profits of the company.
The Disadvantages of Providing Money Back Guarantee
Apart from the benefits, there are some disadvantages to the whole method of providing a money-back guarantee on the products. Here we are going to mention some of these cons.
- There is a chance that you might end up getting some customers who are frauds. They might use the product all that they can and then send the product back just before the guarantee period is over. It is one of the most common problems that most companies have to face.
- The business accounting can get a bit complicated, to begin with. The account handling becomes difficult because the sale cannot be recorded unless the customer uses the product without returning it. This can make things complicated.
- While you get some returned products, you might not be able to sell these products as a new one. This can result in some losses.
- Not to mention that the cash flow of the company might be a bit affected if someone returns the product after using it.
Some businesses opt for different strategies to enjoy better conversions. Two plans that are quite predominantly preferred by the businesses are Money Back Guarantee and Free Trials.
Money Back Guarantee vs Free Trials
When you offer a Money Back Guarantee with a product, it plays a crucial role in building trust with the users. It is quite effective in increasing the sales of a product, as the people will be ensured that if the product does not satisfy their needs, they can return it and get their money back.
With free trials, you can witness a significant increase in the signups for your products or service. So, when you offer free trials, people do not prefer checking for the money-back guarantees and they immediately opt for the free trial versions.
In the long run and for sustainable existence, money-back guarantee policies can be more productive, while free trials can ensure more immediate response for business.
So, these are some of the essential things that you need to know about the money-back guarantee. All we have to say here is that you need to use this strategy wisely.
Strategies related to Money Back Guarantee have been a widespread practice from the very times when people started buying and trading goods. This is one of the best strategies for the businesses that are looking for customer loyalty along with the sales boost.
Money-back guarantee also plays a vital role in growing a respectable reputation for any company, plus it will motivate your existing customers to opt for new things.
All in all, with the right inclusion of Money Back Guarantee with your products and services, you will be able to convert those customers as well who had any kind of hesitation before opting for your goods.
So, what are your thoughts about the importance of Money Back Guarantee in running a business? Do you find it useful in converting more number of prospects of your business? Share your views with us in the comments below.
Companies use various pricing strategies to generate profit by selling the same product. price discrimination is popularly used pricing strategy by companies to generate profit. In a price discrimination strategy, a firm sells identical goods and services to customers at different prices. The seller makes this possible by adopting various methods such as superior packaging to persuade customers to buy identical products at a higher price.
Companies divide customers into different groups based on various attributes and charge different prices from each group. Companies identify different market segments and ask them to pay less or more depending on their willingness to pay.
For example, the entry fee of the Taj Mahal is Rs. 50 per person for domestic tourists, whereas the entry fee for foreigners is Rs. 1300 per person. In this example, it is considered that foreign tourists are willing to pay more price.
It is one of the best methods to earn a profit. Companies are not required to make separate efforts to generate profit. They can earn more profits just by dividing the market into different segments.
The willingness of consumers to pay for higher prices depends on the relative elasticities of demand. For example, consumers part of relatively elastic sub-market pay lower prices, whereas consumers part of relatively inelastic sub-market pay higher rates.
In the article ahead, you will learn about the definition, types, examples, objectives, and necessary conditions for price discrimination.
Table of Contents
Price discrimination can be defined as a pricing strategy that is used by sellers to sell identical goods and services at different prices to a diverse group of customers based on various conditions such as demand of the product, the willingness of customers to pay.
The followings are the main types of strategies.
1. First Degree Price Discrimination
There are two conditions for exercising first-degree price discrimination, such as Monopoly in the market and the knowledge of absolute maximum price. The absolute maximum price can also be known as reservation price. The goods and services can be sold to a consumer at the highest price that he is willing to pay. In this profit earned by selling each individual is added to the total revenue generated by the company.
The total revenue generated by a company by selling goods at different prices is equal to the total of consumer surplus and producer surplus.
First-degree price discrimination is challenging to implement than other types of price discrimination. Because while using first-degree, the seller needs to determine the right price that a customer will be willing to pay to buy a particular product or service. In hospitality, airline, and motorcar industry, first-degree is easy to implement. Because in these industries, the transaction taking place between a consumer and seller is private.
The seller can pitch price to the buyer based on the information obtained from records, or it can be predicted by the looks and status of the customer. Moreover, e-commerce companies make the use of data mining techniques to obtain information about their various customers and thus giving them offers accordingly.
Even though first-degree is challenging to implement but when implemented rightly, it allows the seller to generate good profits.