Cost Control and Pricing Methods For The Small Business

Mikel S. Brantley

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An important part of the American dream is the ability to start and own a business. Hundreds of thousands of new firms are started each year. Small business is the heart of the American economic system and essential to its overall well-being. The failure rate of small businesses, however, is a major concern to businessmen and government at all levels. It causes economic losses to both individuals and taxpayers through increased business loan rates and the costs of bankruptcy filings. A lack of management education is often cited as a direct cause for business failures. Chief among management problems is failure to control costs and inadequate pricing decisions. Cost control and pricing decisions for larger firms have evolved almost to the level of a science with the widespread use of sophisticated computer based management information systems and managerial accountants. The small business world, it seems, has not yet been able to tap this pool of information on business techniques, despite the ease in doing so. Even the use of microcomputers and the analytical capabilities they provide has not been able to stem the tide of failures. Fundamental business errors are still being made.