The biggest error many new businesses make, in their first few years, it to under-price their products or services. Many businesses go out of business within the first 3 years, some within their first year, as they never get off the ground. Pricing can make or break a business!
There are lots of things to consider when setting your pricing at a very early stage of business. What is your unique selling proposition, have you worked out where you fit within your market place? This will help enormously when pricing your products or services.
Are your products hand-made? Are they labour intensive? Is it mass produced? Is your service unique? Do you offer a premium service? There are so many questions that need answers.
Pricing too cheaply can give the wrong impression, particularly when supplying a service. People assume if it is cheap then it is inferior too. If you offer discounts too readily then why should people pay the full price? Offering a discount either means you were overpriced or are not very confident of what you’re offering.
Pricing is a mind-set issue as much as anything else.
Often when I have sessions with clients I can advise them where they ‘sit’ in the market place and how to price accordingly, for what they are offering.
At the end of the day if your business is not making money or profit, then you must question why? Maybe costs are too high and prices too low. What is the point in working long hours to get your business off the group for little or no reward, you may as well have stayed employed!
If you are not happy with your profit or income and not sure why you’re not earning more, then perhaps we need to chat about your pricing?
See my blog on Pricing Your Products for more information.