What to Consider When Setting Your Prices
by Elisa Balabram
I received great feedback on Facebook and by email about the article “Six Myths that May Be Stopping Your from Valuing Your Work Well”. The key to setting your prices is to first investigate if you believe in any of those myths, and if you do, figure out what’s behind it and let it go before you come up with your prices.
The steps to setting up prices include:
- For a product-based business, make sure to add all the costs to purchase the materials and to make your products, including shipping costs, utilities, insurance and labor. Research the markup of your industry, so that you know where to start.
- For a service-based business, calculate how long it actually takes to deliver the services, not just the time you spend with the client.
- Investigate your competitors’ prices but do not obsess about them. This information will give you a clue of how the market is and what your clients may be willing to spend.
- Get clear on your target audience and research what they can afford and how they associate prices with quality. Keep in mind that people are usually able to come up with the funds needed when purchasing something that they truly value.
- Make a list of at least ten reasons why you are unique and what sets you apart from your competition. (Huge Value!) This will give you the strength and confidence to possibly charge a higher fee than your competitors are charging.
- Yes, great customer service is an unbelievably important value added, don’t take it for granted.
- Calculate your personal and business breakeven point.
- Consider your lifestyle, are you going to be able to afford it with the prices you are setting?
- Take in consideration the number of hours a week you are planning to work, and the number of billable hours available.
- Double the amount you came up with.
How do you feel about the last one? If doubling your prices is too much for you, start by increasing the number you came up with by 10-15% and see how it feels. The ultimate price should make you a little uncomfortable but not too much, or you will be stuck and hope that nobody ever asks you how much you charge.
Elisa Balabram is a business and self-love coach, a writer, speaker and the author of “Ask Others, Trust Yourself: The Entrepreneurial Woman’s Key to Success”. She is passionate about coaching women in a deeper, spiritual, mental and emotional level to help them become more self-aware, practice self-love and realize their desire to start or grow a business or creative endeavors and pursue their life’s purpose. She launched and published WomenandBiz.com for nine years, and received the SBA Women in Business Champion of the Year Award in 2008. You can read her blog, schedule a complimentary Skype call and/or order a copy of her book at www.askotherstrustyourself.com, and you can follow her on Twitter @womenandbiz.