Pushing To Business Success

Pricing is probably one of the toughest problems you will face. There is no pat solution when you are trying to price your goods or services.

Price = product + service + profit + image

Price will need to include:

1. the cost of producing your product
2. the cost of providing any needed services that may accompany the product.
3. the amount of profit that you need to make in order to stay in business.
4. you can play "image" into your price - are you trying to portray the best quality or the lowest price. This may also depend on your branding strategy.

Before you consider your image, take a look at your competition. What are they charging? If your USP (unique selling proposition) has nothing to do with your price, then you will want your price to be comparable to your competition. If your USP has everything to do with your price for instance.

LOWEST PRICE IN TOWN or BEST QUALITY IN THE NATION

then you will need to adjust your prices accordingly.

Price can be a direct reflection of quality or even perceived quality.

When we started our business, we talked about price a lot. First, we determined we would charge everything by the hour. Second, we had to determine what to charge by the hour. We didn't have a lot of experience in certain areas when we started, but we needed to get clients and we needed to get experience. So, we checked on rates of our competitors, they were charging around $50 - $100 per hour. So we charged $25 an hour. We were cheap, that was part of our branding. We got a few projects under our belt, read a lot, learned a lot, and kept up with technology. Within one year we determined to increase our rates. We doubled them. We've stayed at $50 an hour for the last 2 years. This did not deter clients from giving us repeat business.