Finding the Right Price: How Do You Charge Fairly While Still Making a Profit? As A Small Business

Question

One of the biggest challenges for many small business owners is knowing how to set prices. You want to be fair to your customers while also making sure your business is profitable and sustainable. How do you determine what to charge for your services? Do you base your pricing on time, materials, competition, experience, or your desired profit margin?

What advice would you give to a new business owner who is trying to find the right balance between being affordable and making sure they are not undercharging themselves?

anthonysalazar · Answer

Probably the biggest paradigm shift a small business owner can make is changing from time or labor based pricing to value based pricing. Selling the dream outcome and desire your ideal customer wants, not just based on an arbitrary formula of COGs + margin.&nbsp;

mims01 · Answer

Great point. A lot of entrepreneurs get stuck trying to justify their price by the amount of time something takes, when the real question should be: “What problem am I solving and what is that solution worth?” Value creates a stronger business than just trading hours for dollars.

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Finding the Right Price: How Do You Charge Fairly While Still Making a Profit? As A Small Business

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