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How to set the right price for your products

Making profit from your product or service is the ultimate goal, right? But a lot of the time as a start-up or small business you can often lack confidence in your pricing and ability to pitch the quality of your work.
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Photo of persons hand writing on a pad of paper whilst the other is using a calculator

LIFE STAGE:

How to set the right price for your products

Making profit from your product or service is the ultimate goal, right? But a lot of the time as a start-up or small business you can often lack confidence in your pricing and ability to pitch the quality of your work.
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Photo of persons hand writing on a pad of paper whilst the other is using a calculator

First things first, know your market, what’s the average price for your product or service in your market area? 2. How much do your competitors charge? See what your opposition is charging and then make a decision to match or beat them depending on the quality of service you provide. 3. Make sure all your costs, direct and indirect are covered in your quote.

Here is a great place to start, remember the four P’s:-

Diagram detailing "The 4 P'S"

It’s always good to know the value of your product or service and offer your customers a fair and respectable quote, keeping into consideration the quality of the service you will provide over the amount of time or effort required. Quality of quantity! This is what will bring your customers back. While this is important, it’s also worth noting that staying open minded and up to date is a must. Your prices may need to increase or decrease from time to time depending on your competitors, the demand of your market, or even a change in your customers.

If you have difficulty figuring out the quality of your pricing, follow the Quality Pricing Model to point you in the right direction.

Diagram showing the Quality Pricing Model

The golden rule is to be fair, consistent and transparent.

Five key pointers:

  1. Quote quickly (within 48 hours)
  2. Quote for solution provided not time required
  3. Have clear terms and conditions
  4. Be open minded
  5. Keep it simple

If you are looking for business support to start or grow a young business and you are a UK based entrepreneur or a student or graduate of Birmingham City University, we invite you to apply for STEAMhouse Business Incubator membership. Please send us an enquiry and we will contact you to discuss how we can help.

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