This has to be the number one reason good people fail at business. No one cares how nice you are, or how dedicated. Everybody just wants to take your money. It’s your job to take all your expenses into account when pricing and managing your business.
I used to work in a computer lab once. I was with him for twelve years from the moment he opened to the day he closed. And I saw everything he was doing wrong. He was thoughtful but sadly that is the reason he’s no longer in business.
The lab was considered the biggest in his area and he had over 10,000 clients. When I was managing the lab I saw between 50 to 100 computers put in for repairs on a daily basis. There was a sign for all the clients to see, that if your computer is inspected and you decide not to repair you pay $15 for the inspection. Do you think anyone ever paid that $15?
The owner allowed every one of his clients to skip this inspection fee because he was nice. Let’s do the math, $15 * 30 = $450 (taking into account that half of the clients didn’t want to repair). Take 22 working days in a month and you get $9,900. That amount covered most of his rent, or half os the salaries. He lost a lot of money on other discounts he gave clients, not to mention clients that didn’t pay at all.
At the end, the high expenses and high tax rate killed his business and he lost a lot of money. At some point, his wife wanted to leave him. The thing that kills me is that he’s not a bad guy, he was just too nice.
When you’re running a business remember that everyone’s hand are in your pocket. Your employees, suppliers, the state, everyone. You have to make sure you still have something left over for yourself. If clients want a lower price, let them go to someone else who will be out of business in no time. You have to look out for yourself.