A Very Good Question
As entrepreneurs grow their businesses, they should consider whether to raise their prices. Some owners worry that they will lose customers by doing so. They still need to weigh whether they are bringing in enough revenue to pay their key employees decently while also making a profit to use for future growth. Raising even some prices can move a business owner out of his/her comfort zone, perhaps inspiring the owner to improve the quality and/or marketing of his/her products or services. And remember, money is not the only factor that influences most purchasing decisions.
Here are 3 ways to analyze your price. (1) Take a look at what your direct and indirect competitors are charging for their offers. Direct competitors are those who offer services very similar to yours. For example, if you offer website design services, with whom are you most likely competing? Indirect competitors are those who offer an alternative service. For a website designer, an indirect competitor might be Facebook where the customer uses a Facebook page instead of a website.
(2) Consider how much your prospects are willing to pay for your services and even ask them for feedback so you can find out what they are thinking in terms of price.
(3) Look at your costs, your expenses, incurred in providing each offer. Decide what your profit margin needs to be so that you can pay yourself and cover your fixed expenses.
Do not be afraid to price your offer based on the market and what your services are worth. You will be surprised at how this will work in your favor in the long run. If you are in business to make money, make sure that your price covers your costs, including your salary, plus a net profit margin to reinvest in the business.
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