3 Things You Must Know to Determine Your Pricing

It’s the hardest thing to figure out when you are starting your business…what do I charge? And as women it can be even more difficult to determine because we want to help. That deep desire to help people is usually why we started our business to begin with. And now it is the thing that is making it hard for us to charge the right price. But where do you start? How do you figure it out? Here are 3 things you must know to determine your pricing. Once you know these things you will be well on your way to determining the right pricing for your product or service.

#1 – Know Your Value

This one is the hardest but most important, so we will start here. Take into consideration your education or experience with the product or service. Your expertise adds value. And your risk of doing the work to get this business off the ground counts too. This one is tricky because you are thinking (or saying) “But this is easy for me, it doesn’t take any time at all”. And that is true…because you have the time, effort & talent invested in it. So don’t short change yourself here. Really take the time to determine the value you bring to the table.

#2 – Know Your Industry

This one should be a little easier to figure out. Check out what others in your industry charge for this product or service. In most industries this is a simple Google search to find the going rate. For some you have to dig a bit deeper. In the design industry for example, it is uncommon for pricing to be posted on a website. But asking around whether clients or others in your field , you can get an average price. Keep in mind that you should always consider education & expertise when reviewing what others charge. And make sure it is similar to your background before using it to set your pricing.

#3 – Know Your Customer

This is the most important one to making your product or service marketable & profitable. Every industry has standard pricing that varies from region to region. As you have gathered information make sure to consider what your market will bear. You need to know who your customer (or avatar – when starting out) is and what their income is, what problems they most need to solve & see how your product / service meets that need. For instance, a hairstylist in LA will charge significantly more than a hairstylist in Cleveland, because the customers in LA are willing to pay more so they can charge more. This knowledge will help you determine your pricing and finding the sweet spot for your company.

Knowing these 3 things will help you be prepared to charge what you are worth & what your customers will pay, creating a successful business. It takes time to figure these out but you can do it. And the time investment will be worth it in the end.