How to price your products?

In our training as a business coach there are topics that we can not neglect and give special attention as is the case of money. Many people find it hard to dedicate themselves to monitor the finances of their lives on a daily basis, but if we are starting a business, we are planning to meet our closest goals in a certain period of time. The best way to meet those goals is to manage the economy of the business in a rigorous way. Here we will be talking about how to assign the price to the services and the aspects to take into account for our company. Many of us stop in this subject and it is where we need the consultancy of experts in finances to assure our economy, because we will try to share some solutions to those problems.

Market research.

It is impossible in our days to establish an adequate price for both your business and the customer without knowing what is the demand in the local, national or global market. In these times information is power, if we are going to start a business and we do not see its previous behavior in the market then we are making a big mistake.

To price our services or products it is necessary to study the market of offers and demands in a general sense, and then we can go into specifics. We can start with questions such as: How much does our service cost in the labor market and why?

The competition.

It is clear that when we look at the market we always stop specifically at businesses similar to ours, since they are our main reference, and even more so if they have experience and clientele. It is important that once we have defined our market niche we identify which is the competition, which company offers our same service? What prices do they have and why? Here we can get a closer reference to be able to establish standard prices with the competition. When we analyze the competition and their offer we look at what are their strengths and weaknesses, we can take advantage of their weaknesses to offer us a different proposal.

Cost of production of our company.

As a necessary aspect for a price estimate for our product or service, we go into the cost of production by our company. The cost of production defines about sixty percent of the price we want to establish because there we calculate resources used, time invested and quality. The price is not a value that we take only as a reference from other businesses, but the greatest guarantee of what the price could be comes from the cost of production. Another necessary aspect to take into account for our price after the production cost is the value, what do we offer with our different service in the market, what makes us exclusive?

Price of the service.

For our business to be sustainable it must not only report the cost of production but also generate profits. To establish a price for our service we take into account the cost of production plus a percentage increased as profit. This percentage of profit would report the retribution to the time invested and the value for the client. Based on this, it is necessary to take into account the client for whom our service is intended and this would determine a differentiated price according to levels of complexity. For example, for a business coach to offer his service, he establishes rates for novice entrepreneurs, students, companies in formation or companies of high entrepreneurship. The price is also measured by the modality of the advice, whether it is individual or group coaching of clients, online or face-to-face.

Revenue vision.

An important aspect that can help us to define the price of your service is to specify with a long term vision how much you want to earn in a year, monthly or weekly. This does not mean that you are going to cover you