How Do You Set Your Prices?

Business owners often have a hard time figuring out how much to charge their customers.

There are a couple of approaches. Some people calculate their costs and then double that amount and they have a price. Others look at their competition and either match or try to set their price lower.

I look at pricing as having a floor and a ceiling. You have to figure out how much money you need to earn so that you can have the life you want to live. The prices you charge to earn this much money would be the floor. You cannot charge less that this number. You also cannot charge more than people will pay, also known as what the market will bear — this amount would be the ceiling.

Have you taken a look at your prices and figured out what you need to charge to live and what the maximum price would be? Do you know your floor and your ceiling?

Some products and services are unique to your business. If you are the only one providing it — then you should be charging more.

I often talk to business owners who are not comfortable telling their customer how much their services are worth. These owners come across as apologetic. This is a mistake. You are in business to make money, you are good at what you do and there is no shame is asking to be paid for good work. Tell people the price and then stop talking. Don’t justify your price unless you are asked to do so.

Your business will benefit if you pay attention to your pricing.

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Painless Financial Training Group Inc. with Debi Peverill

Understand Financial Stuff, Painlessly