If there is one undebatably important thing in a business, it’s the fact that the business has to make a profit. As shallow as that sounds, that is basically the basis of nearly every single business out there, and if you’re not doing the right things with your business, that might prove to be somewhat difficult. As broad as it sounds, the truth is that you need to learn to properly value your services, or the products which you are selling. Whether you are dealing with distributors, sellers, or even customers themselves, you need to know how to price your services and products. There is a fine line to walk, if you price your products too low customers will think you are either inexperienced or just not worth any more than that. On the other hand, price too steeply and potential customers will look for someone cheaper. It is certainly a harder task deciding how to price yourself than some might initially expect, but there are several things you can keep in mind to help you decide on a final price.
Know your target market
First of all, you have to establish what kind of people or companies you want to attract with your business. Do you want to go for the average Joe or are you aiming your services exclusively at corporate giants? While each side has its own obvious benefits, the target audience of the average person is bound to be much wider just due to the fact that you’re aiming for the average person. Don’t think of it as the lowest common denominator, because it is not exactly that, but it’s something along those lines. Then you have the corporate business audience, and while they are definitely a tougher crowd to please, some good charisma at meetings and sufficiently high prices will strike the deal with much more ease. It is entirely up to you which one you decide to go for, and according to that you will have to price your services appropriately, just remember, the two are not mutually exclusive, and providing a premium service alongside a basic one is always an option.
Know your competition
Once again, this is absolutely dependant on the current state of the market, but there are a few factors related to your competition which could make the pricing choices much easier. Do you feel like the market is somewhat oversaturated? Do a lot of different companies provide almost the same services as your own? There are two ways of going about this, one way is to differentiate yourself from the other companies with a somewhat unique selling point. It doesn’t even have to be unique per se, but make it somewhat of a slogan or the forefront of your service, make it your company’s speciality in order to stand out from the crowd. The other way is simply undercutting other companies. Some say that it’s “rude” or “scummy”, but at the end of the day, business is business and if the market is standing somewhat still, then something has got to give. If you can’t find any particular way to make yourself seem like the more appealing service, then just undercut your opposition’s prices. If you can’t bring yourself to do such a thing, but you don’t want to end up on the street either, then you either make the hard decisions, or you move your business to an area with less competition.
Have dynamic pricing
Any smart business owner knows very well that some times of year are busier than others no matter what area of expertise you are involved in. One of the most basic examples which gets the point across perfectly, is to assume the position of an ice cream salesman. During the winter and autumn, the chances are that much fewer people are going to be interested in eating ice cream, so lower the prices to entice the customers a little bit. However, during the summer, everyone is going to be breaking down your door just to get that much-desired ice cream for the sweltering summer heat, meaning a slight increase in price won’t really stop anyone from buying it anyway. This kind of logic translates into any business which is known to have seasonal shifts in amounts of customers or workload, so use it to your advantage.
What kind of service are you doing?
Some services have definitely gone up in demand over the past decade or so, and if you have been running the business since around for a lengthy amount of time, and still have not changed your prices accordingly, then you’re missing out. Most businesses related to technology in one way or another have most definitely skyrocketed in popularity, sometimes to the point where there are whole debates on what to charge for SEO from SEOJet and other companies. Rarely do you get articles which discuss pricing for specific businesses such as that, but the demand is most definitely out there, and considering that advertising on the internet is indeed the future, they most definitely have a reason to bump up prices. The same goes for all sorts of “premium” services which deal with technology, whether it’s IT support, selling mice or keyboards, computer parts, computer repairs, in-store troubleshooting, it could all be bumped up a little higher since it has reached the mainstream. Technology has grown so much lately that it is no longer only relevant to IT technicians and tech enthusiasts, but just about everyone nowadays. A vast majority of the population browse the internet, scroll through social media on their smartphones or laptops, and watch movies on Netflix.
What It’s worth VS how much you can sell it for
If you feel like you are the paragon of fairness and want to run your business with that virtue in mind, then god bless you, and we need more people like you in the world. But sometimes even the fairest and genuine people have a guillotine over their head and need to pay the bills at the end of the month to keep their family afloat and pay their employees. Sometimes, business is just business, and no matter how much you wish it wasn’t, something massive would need to happen to change that. That said, think about what your product or service is actually worth on paper, and how much it is worth for the average person. Of course, you can’t exactly be selling anything at “trade price”, because that gives you literally 0% profit, but you can try to be somewhat humble with your profit margins. Despite that, if tough times are coming, maybe it’s time to think about how much you could get away with charging people for your services, rather than just making enough to stay afloat. Of course, in a perfect world, everyone would just be doing each other favours and prices would all be low, everyone would be happy, and no one would ever be short on money, but we are currently living in a world that is far from perfect, and the rat race slowly gets to everyone. This does not particularly have to be done to line your pockets alone, not at all, If you feel like your staff has been doing exceptionally well and you wish to reward them accordingly but don’t feel like you can because it would be cutting into the stability of the company, then it might just be time to raise the prices a little bit. For your sake, and the sake of the people who depend on you for their livelihood.