How To Set Your Price

How To Set Your Price in Small Business

Setting the right price for your services can be a challenge especially in the first year. 

You may have to set your price a little lower when you first begin, but it shouldn't be for too long. You want your price to represent your services, but you also have to gain clients. Some clients may not be willing to pay premium prices without a portfolio of services, goods, or even reviews making it a little more challenging to set reasonable prices within the first year. 

We are not saying work for free, but  we are saying that you can't have the highest expectations off the bat. Pro bono work for friends and family as well as organizations can really lead to great connections, reviews, and pad that portfolio. Once you have a few of these volunteer activities out of the way, you should be able to instill some financial faith and grow your client base.

Once you have the clientele make sure to set the right price right away. Even if you are just starting, price plays a significant factor in the way your products/services are perceived. If the price is lower than average they may assume that you're under qualified or "cheap" which could sway your customers opinion of your services. 

But it may also be unreasonable to charge top dollar when you aren't on par with other top dogs. Find a mid-range pricing plan that feels comfortable, gives you a profit, and works for your clients. After a year or two raise your price to reflect the level of your growth in your craft, keep up with expenses, and that will allow you to work this job full time. 

A key part of setting your price is making sure it covers expenses, travel, and a margin of profit to pay off start-up costs (if they apply). Even if it's only a little you want to try to break even or stay within a -1,000 range your first year. If you're way below that negative range you may be marketing yourself incorrectly, your branding could be inaccurate or mirepresentative, or you may not have a successful business venture. This end of year is a great time to reevaluate your choices. 

If you are in a business that is offering packages keep it simple - try to refrain from offering too many options. Clients like to keep it simple. However offering customizable packages can also help cater to your clients needs.  A rule of thumb, is that the middle package or product is the most purchased, because clients don't want to go for the high dollar but they want a little more than the lowest priced item. Setting your middle of the line product is going to to be key.  

Of course every price is different - area, experience, and quality effect prices so why not search for comparable businesses and check out their prices. These prices can become a guideline on your own price sheet. While you're at it take this as an opportunity to network with like-minded businesses - why not ask them how they set their prices within the first year? 

Let us know if you're struggling with setting your price - we'd love to help you find the perfect price for your packages or product ! Comment below and we'll get back to you.  

 

 

 

businessJessica Fowler