Pricing your product or service can either break you or make you. Who is your target market and how flexible will your prices be to accommodate your target market? What are your competitors and what are their prices? You don’t want to underprice or overprice your products or services.
What is your goal? To make money or to serve people? Of course every business needs to generate money but how much money are you trying to generate? Enough to survive and make some profit or are you trying to become a millionaire. There is a HUGE difference. Whatever your goal is, the number one key aspect to generating money alone is having the right sales team. Everyone isn’t outgoing, so it’s best to hire someone that is. That person represents your company through your customer service.
What do you want your products or services to be known for? Price or quality? For example you can purchase a pair or flips for $1 or you can purchase a pair of brand name flips flops for way over that amount? Which one do you think your target market will appreciate the price or the quality or both? Once you determine your goal as far as price or quality, now you can determine how do you want to go about achieving that? Should you do everything in house or outsource your work? What is the most cost effective way to produce your product or service? Factor in skilled labor vs your labor. Also factor in what is accessible to you vs someone you contract with? The person you contract with maybe able to offer more because of their own personal contacts or experiences. Do you have the space to store or provide your service? When determining your prices, you have to take all this into consideration.
As the cost of living constantly changes along with everything else that is affected by that, you have to constantly re-evaluate your costs. Re-evaluating your costs can help you determine the perfect price at that current time. This will serve as a guide when to raise or decrease your prices. Review your sales once you make these changes to ensure that you made the right decision.
How do you determine what products or services to provide?
How do you determine when to add or subtract the product or services that you started with?
What business tools do you use to make these decisions?
If you would like to learn more about this topic, please feel free to take our “Is starting a business right for you?” Workshop.