So you’ve come up with a great idea for a service or product. What should you charge for it? Now I didn’t study economics or price points in college, so I have to set my prices based on common sense.
Here are some common-sense ideas to come up with a reasonable price:
- Add up your expenses: How much will it cost you each month to pay for rent, cell phone, bank fees, food, utilities? Add all that up to determine what you MUST make to live.
- Scout the competition: Fire off an email from a Yahoo or Gmail account to your competition to discover what they are charging for the same product/service (if it’s not already advertised) and try to keep your prices below them (for now).
- Consider the future: Do you want to expand or perhaps buy a new car for the business? How much money will that require?
- Ask family and friends what they think is reasonable and what they would be willing to pay.
- Do it FREE!! (At the beginning). Then once you’ve proved you can provide value, charge a reasonable price.
You also have to take into consideration the amount of money your customers have. Do they live in mansions on the hillside or do they live out in the trailer park? Will you lose a lot of business by setting your price too high?
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Tags: Business, entrepreneur, pricing
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