Once your small business establishes its products and/or services, the next most important step is pricing. Proper pricing can be the difference between a profitable business or one that struggles to survive or even gain ground. Charge too little and chance that your profits will suffer, charge too much and possibly drive potential customers away. So how do you strike a balance and gain confidence in your pricing strategies?
Brad Sugars’ article, “7 Biggest Mistakes In Setting Prices“, offers some good points to consider when you address your prices. One mistake I have personally fallen victim to is #5. Even though I knew my products were better than my competition, I didn’t think potential customers would take that into consideration when purchasing. So I started out by keeping my prices the same as what my competitors charge. With my returning customer’s praise of my products, I soon became confident enough to calculate my own product’s worth.
I think pricing is one of these things that a little experience goes a long way. No matter how many pricing suggestions you read about, it’s hard to go into a startup with enough confidence to get it right from day one. You simply have to live it, to learn it.