Set the Right Price

Your price should be a balance between what your customer feels is fair for the value they are receiving and what it costs you to provide your product or service.

This is why it’s important to know who your customers are. As a tip, show your product or service to your target customers and ask them: 1) would they pay for this product?  2) how much would they be willing to pay? 

Here are some questions to help you define your costs and prices. We will explore the costs in further detail in the budget section.

• How much does it cost to make a single unit of your product or provide your service?
• What are your monthly fixed costs? 
• How much do you want to pay yourself?

As you set your prices for each service or product you provide, consider what your competitors are charging. There are two main types of competition: direct and indirect. 

Direct competition are those businesses who offer the same products/services as you. For example, a coffee shop competing directly with other coffee shops. 

Indirect competitors sell a different product but compete for the same customers. For example, a restaurant that also sells coffee. Understanding your competition will help you understand your clients and what they need from your business.