With Black Friday, Small Business Saturday and Cyber Monday behind us, the crazy sales may be over but the holiday shopping season is still in full swing. Whether or not holiday sale pricing is part of your business strategy, setting an appropriate price for your goods or services must be. Optimally, you’ll find that sweet spot where you can make a profit and your customers can feel comfortable with your pricing and value.
For many small business owners, that’s not an easy task, particularly when they are competing with large companies providing similar offerings. A recent Small Business Administration (SBA) post, How to Price Your Small Business’ Products and Services, tackles this issue.
In the post, small business owners and industry experts discuss six key elements of pricing strategy, provide tips for making strategic pricing decisions, and suggest tools for analyzing your business and setting prices. Sections include understanding how your costs should impact your pricing, competitor pricing, front-end and back-end tier pricing, conversion pricing, when to use higher pricing, and when to undercut the competition.
Take a look at the resource links in the post as well. Of particular interest is the How To Price Your Products and Services cheat sheet from the Iowa Small Business Development Center, which provides useful help for analyzing your total costs. Read the SBA post Understanding Gross Margin and how it Can Make or Break your Start-Up, which provides a number of formulas you can use to calculate your cost and gross margin. And if you choose to raise prices, read How to Raise Your Prices Without Losing Customers.
So whether your business is a start-up, an up and comer ready for explosive growth, or an established company looking to revisit pricing strategy, use these resources to help improve your bottom line.
This Small Business Tip from PaySimple offers one more way to optimize and accelerate your business.