What Should You Charge?
It’s one of the most basic, yet most elusive questions asked in all types of businesses. Of course you want to make money, but you also want to set prices at a reasonable rate so that you will not lose business.
So how do you strike that balance? How do you calculate pricing for products and services offered through your business? How do you determine a rate that is right for all involved?
The first thing to remember when setting prices for goods and services is that you are in business to turn a profit – not just to be a nice guy or girl, but to make money. If you do not set your prices at a rate that allows for profitability after expenses, you do not have a profitable, sustainable, business, and success in small business will always be unachievable.
If you’ve set the bar too low, you’ll be out of business within months.
Clients And Customers Second:
Naturally you cannot completely ignore your clientele and customer base when setting your prices. Whomever your target audience is, your prices must reflect a cost that can be supported by that market segment. However, if you do your research and give value for the money, you should have arrived at a cost sustainable by your group.
Tips For Setting The Pricing Bar:
Let’s take a look at the actual process of setting prices for products and services. Use these tips and market factors to help you arrive at a competitive pricing structure.
Justification Through Value:
The one factor to always keep at the forefront of pricing is value. To be clear here, this is not about justifying your price. Your price will be justified if you have set prices fairly, based on the true value of your goods or services. Focus on the value you deliver, set a reasonable, sustainable fee, and be confident that you have served the greater good of all involved.