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This is the biggest problem that people have when starting a business. If
you're selling a product, it's pretty straightforward: cost + overhead +
%profit = what you charge. But, if you're selling a service, that's more
difficult. How much is your time and knowledge worth? How much time in dollars
will you be saving your customers by providing your service? How important is
your service? If you're one of many in the same industry, what makes your
service special or how is it better than your competition?
When I started my business, I took a researched similar types of companies.
I was able to get an idea of the price they were charging. By offering some
extras that my competition wasn't I could justify charing more and my customers
knew that and didn't mind paying extra for the added services. I found a niche
that wasn't being met by any other size company similar or larger.
To determine what you should charge, find out how unique you are, the type
of quality you can deliver, the special service (if any) you can promise, what
your costs (of product) are, what salary you want to be paid, what your
overhead is, and how much profit you want to realize. But be careful, you
can raise fees if necessary, but cutting prices may indicate to others that
your service is overpriced. That is not a good sign. If you need to boost
seasonal sales, try special offers, off-season discounts, contract/retainer
prices, etc. But don't ever forget quality. No matter how much someone
spends for your product or service, they expect the most their dollar can
buy.
By Bob Brolhorst
Wave 5 Marketing
bbrolhorst@wave5marketing.com
http://www.wave5marketing.com |
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