New women business owners must come to a conclusion as to what prices you are going to charge for either services or products that you are offering to the public. This can be a fairly easy process for some who have no compassion about how people are reacting to the current financial crisis happening around the world. But to the rest of the small business population, deciding on how much you should charge is something that might be keeping you awake at night and filling you with stress.
You must determine how much money you want to earn. (Download Worksheet)
Another key ingredient for deciding on price is researching what other businesses similar to yours and offering similar services are charging. Now, bigger corporations will usually have a high price for their products because they have a higher overhead to deal with. Of course, they will also have the name branding that goes along with being a major company to help them set a higher price that people will actually pay. For example: you wouldn't buy a smartphone that someone built it in their bedroom out of junk parts for the same price as you would an iPhone, would you? Similarly, you decide on whether to ask for higher end pricing based on the research you've conducted for similar brands. For example some consultants charge $150 per hour and others charge $500 per hour. You decide.
You will also have to take into account how much money people are saving these days. The financial crisis is taking its toll on a lot of people in the world and some people don’t have the same amount of money to spend on things that might be considered more frivolous these days. Their immediate needs such as food, electricity, and other necessities are much more important than an eBook on how to raise chinchillas for fun and profit, unless, of course, they are interested in raising chinchillas.
If you are offering a service that is needed, like debt relief tips, economic counseling, business consulting or some other aspect that will help people, then they will be more inclined to pay a higher price, unless they can find it cheaper through someone else. You will need to take all of this into consideration when you are determining what prices you should charge for your services.
When considering prices you should also have a clear understanding of how much money YOU need to make for your own living expenses as well as to operate a profitable business, with some room for negotiation, if necessary With that said, don’t be afraid to lower your prices if you don’t get many people paying you when you first start out. They may want to use your services, but they don’t have the kind of money you are asking for to spend.
If you do lower your prices as a new business owner and find that more people are interested in what you are offering, then you can start to make a name for yourself in your industry. Once word gets out that your services are professional or your products are of high quality, then more people will want to spend money with you and eventually you can raise your prices a little at a time until you are back up to your optimum price. It’s a difficult game to get involved with if you aren't sure where you want to be in the future. Consider carefully what the bottom-line, mid-rage and high-range revenue amounts are that you need each month for your personal expenses and to operate a successful business. Your honoring yourself, your business and your clients!