Small Business Price Setting

Often people who start working as entrepreneurs fear to set their price correctly thinking that high prices might not give them any clients. It is in fact, one of the most difficult things to determine is the cost of a product or service. In case you fix a low price you might end up getting exploited and too high price might not get you any business. So, everything needs to be done with a proper approach and calculation. Read this article to learn the skills of price setting for your small business.
Your Customer’s Pocket: The key to set the price for a product in a business is to observe the customer’s pocket. In other words, it is essential to check how much a potential customer is willing to pay to avail your products or services, only then will you be able to set the right prices in your business. People who neglect considering their customer’s budget and estimate often fail to make long term customers, as the moment, the customer gets a new provider within their budget, they will go there.

Proper Comparisons: Make sure that you comparing your products with the right things while setting the prices, else you will do nothing but will make fool of yourself. Try to analyze the price of the same products and services of your competitors and set the price accordingly. In comparison, your price should be bit lesser to attract the customer and if you wish to charge more, than prove that your product or service is better than other similar cheaply available products and services.

Plan A Budget: Planning a budget is another key thing to learn to set the right price for your product or service. Create a well-planned budget with all the aspects of your business including, the office supplies, marketing strategies, outsourcing costs and so on. This way, you will get the actual picture in front of you to see how much you deserve to charge for a product or service.

Ways To Cut Costs: Try to figure out ways to cut costs while setting prices for your products or services. Ask yourself, whether you can afford to go overseas for manufacturing and will you be able to order in larger quantities. Also, ask yourself, whether you will be able to incur driving costs along with packaging costs.

Use QuickBooks: Using QuickBooks is a great way to track your income along with expenses. This way you can actually observe your business profits and loses. Moreover, QuickBooks help focusing on the unprofitable aspects of your business too, giving you better chances to make improvements. Moreover, this way, you will be in a better position to adjust the prices of your products to make more profits than loses.

Just remember that lowering the price of a product or service is a cakewalk. And it is equally difficult to increase the price. So when you are setting the price, don’t set it too low, else you might not get the opportunities to increase it in future.