Last updated on April 13th, 2015 at 02:26 pm

As a small business you, like me, will probably often be faced with the problem of clients asking for discounts.

As with many things in business there are some simple rules that you can put in place and follow to make sure that you are not giving too much away (I recently read about a company that had a turnover of £2million and a profit of only £50,000. It seems that the sales team were giving away discounts to customers whenever they were asked and that these amounted to £1 million over the course of a year!).

Our 5 simple steps are :-

1. Don’t set your basic list price too low and price your products or services realistically.
2. Set parameters your sales team can work to – these can be as simple as discounts based on order size (order more and get a bigger discount) or as complex as the value of the order placed by the customer over the course of the previous 12 months.
3. Train your staff in how to say “no” and how to negotiate with customers
4. List discounts given on invoices – this means that customers can see both the discounts and the list price.  One advantage in doing this is that next time the customer orders you can both talk about the list price and any discount rather than the customer thinking that the discounted price is the list price and trying for a larger discount.
5. Measure the discounts given – you need to know exactly how much money you are giving away to customers and which customers you are giving it to.

By following the 5 simple tips above you stand a good chance of not throwing money away and keeping it where it belongs – in your bank account – so that you can develop the business.