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Pricing Basics for Small Business
Kody Wirth | Oct 29, 2023
Pricing products or services can be difficult.
You can’t just pick a price out of thin air and hope it will lead to profitability.
To do it right, you must understand your costs, customers, competitors, and goals.
But how do those translate to setting a price? This guide will show you.
What you need to know about pricing
Make pricing easy by knowing the basics.
Pricing strategies and models explained
Learn about the common types of pricing strategies, how to apply them, and what it takes to choose the best strategy for your business.
How to price your product
Product pricing can be broken down into four simple steps: identify costs, consider profitability, analyze the market, and test.
How to price your services
Service pricing is far more subjective. While the steps are similar to pricing a product, additional considerations must be made.
How pricing impacts your business
Your chosen price defines you, establishes your market position, and directly impacts operations. Here’s what you simply cannot afford to forget when setting prices.
Pricing is just part of the equation
Finalizing your pricing strategy is one of the last steps you need to take before it’s time to document everything about your business. Along with your pricing, you should have landed on a solid business idea, validated it, conducted market research, and decided on your business model.
If you’ve completed those steps, take what you learned and turn it into a plan for running your business. You’re ready to write a business plan.