Picking Pricing

Last week we talked about how important it is to know about the people you’re marketing to.  Some would say that a more important topic is knowing at what price that group of people will be willing to buy what you’re marketing.  I have to admit that knowing and picking a price that actually works for you is challenging!  There are tons of factors to consider, so today I’ll cover just a few things and I invite you to share your thoughts and challenges in the comments below.

1-you have to be able to pay your bills:

This is what differentiates you between running a business and having a hobby.  If you’re actually able to pay your bills and have (even just a tiny bit of) money left at the end of the month you’re probably doing something right with your pricing (or you’re working way too hard).

2-it has to be a fair price for the service or product:

If you’re asking me to pay $100 for a bottle of water, it had better come from the fountain of youth!  But if you’re asking me to pay only $20 for an hour of counseling, I might wonder why you (a certified counselor) is only charging $20.  The price should reflect quality, quantity, your experience, and to some extent the time involved.

3-figuring out your prices:

First determine how much money you need to make each month to pay your bills, feed your family, and a little cushion.   That cushion is not $10,000 vacations or buying a second home, but we are including some “emergency fund” money to take care of surprises.  Then determine how many hours you can reasonably work in a month.  Let’s say you need $10,000 per month for your bills, and can work 40 hours a week or 160 a month.  This would mean your hourly rate would be $62.50. Not charging by the hour is another conversation entirely.

What lessons have you learned about prices?

 

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