EP155 Business Pricing 101: How to Price your Product or Service
Today I’m discussing what is hands down one of the things I get asked about the most: how to price your product or service. 80-85% of the clients I work with are not pricing their offering in a profitable way, which leads to losses in their company and is one of the major reasons the owners are not paying themselves consistently.
Interestingly enough, while I talk about this all the time, I haven’t yet done a show on pricing. So today’s episode comes to you courtesy of my 11 year old niece. We have spent the last few weeks together as she has also been at my parent’s place in Nova Scotia so she can attend a figure skating camp. In her downtime from skating she has been making all of us beaded bracelets – some on spec and some custom.
Any business with cash flow issues is at risk of closing within 90 days, and getting your pricing right is critical to avoiding this potential catastrophe. Listen in as I share the three steps to pricing your offering in a way that not only makes sense to your business, but to your customers as well. You’ll also discover why planning is so important to any business and the one crucial cost that many business owners fail to include in their pricing.
“Of the clients I work with, I would say that 80-85% of them are not pricing their offering in a profitable way.” – Tracey Bissett
This Week on Young Money:
- What variable costs are and why they’re important to not only profit but company viability.
- Why it’s critical to include the cost of your time in your pricing.
- Examples of the fixed costs you need to include in your pricing and how to allocate these across your offerings.
- The crucial step to pricing your offering once costs are calculated.
- How to price your product in comparison to other products on the market already.
- How to plan for start-up costs in a new business.
- Why planning is so important to any business start-up.
Key takeaways:
- Follow the formula to accurately price your offering.
- Know your variable costs.
- Always include the cost of your time in your pricing.
- Don’t jump into a business without a solid business plan that validates your idea first.
Resources Mentioned:
The Young Money Scholarship Fund
Education has the power to help you achieve your life goals and create a financial fortress. It takes money from many different sources to pay for it.
The Young Money Scholarship Fund has been established to help post secondary students achieve their goals by removing some of the financial strain from the equation. This fund is powered by Bissett Financial Fitness Inc. Scholarship awards start at $250 per student.
Who can apply?
- Post secondary students studying in Canada, excluding Quebec residents
- Students who have helped others achieve their goals
- Students who have a plan for what they will do when they graduate
Apply today or share with a post secondary student who should apply, here!
This episode is powered by the Cash Control Bootcamp:
Has this episode inspired you about your business? To start a new venture or take yours to next level requires you to understand the cash flow cycle and how to manage the cash flow in your business. To help you learn those critical skills I have developed the Cash Control Bootcamp. The Cash Control Bootcamp is an introductory live, online group program that empowers entrepreneurs just like you to demystify your business finances and get control of your money so you can sleep better and provide the lifestyle you want for you and your family. The Cash Control Bootcamp – Know Your Numbers, Protect your Business and Grow for the Future, is for you. Register today here.
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