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How to figure out your pricing!

How to figure out your pricing for your small business

It’s tricky to write advice about pricing as every business is different – and within each business type across the competition, the benchmarks vary wildly! But I do have a few tips – even though we at TLD are:

  • Not the cheapest
  • Don’t always get it right!
  • And not the most expensive either – not by a long shot!

I was writing an article about things entrepreneurs need to get their head around and this one is such a biggie I thought I’d pull it out and dedicate a post to it!

With pricing, I see people getting it wrong, in 2 ways – do either of these sound like you?

  • Either you are too confident and think you can get lots of money but haven’t yet built up your brand, your reputation, or the perceived value enough.
  • Or, you may be undervaluing yourself and need to put your prices up – especially if you are undercharging to the extent where you are living hand to mouth and still working yourself to the bone! Not good!

If this resonates with you, here are my tips:

Improve how you’re presenting yourself

Make sure your online profiles on social media and your website and blog are well designed, well written, simple to follow and clear in our niche/expertise. No matter how great you are at this, you can always do better. Putting the effort here means you show yourself off as higher quality and therefore can charge more.

Offer at least 3 packages:

Of course, this depends on your business type, but most service businesses can come up with three options for their services, at three different price points. Each should be priced in a way where you aren’t shooting yourself in the foot, and where the customer feels they are getting a lot for their money. Make sure each package has a good healthy list of deliverables. For example –I do a content marketing workshop which is relatively inexpensive and a great starting point for any business. Next is a website audit plus a set of improvements on their website, SEO and social profiles. And on the higher end, they can have us do a full rebrand and bespoke website design. Most businesses we come across can work with us through one of these, and the lower-priced options are often a way for them to get to know us and move up the scale to our more “premium” offerings

Take the time:

Pricing is an art and a science. It’s a combination of many things – here’s a list of questions to ask yourself to help work it out – over time you’ll get better and better at it.

  • What do you feel is fair for what you’re offering?
  • How can you make it more value without adding more cost/work to yourself
  • How much do you need for your time?
  • What would you earn if you were salaried? (I’d multiply this rate by 3 because when you run your own business especially in early days, your time is spent on a lot of business development, marketing and admin until you get a team in place)
  • What are the costs of your equipment/labour?
  • What are your competitors in the market charging for the same/similar?
  • How are your competitors positioning themselves?
  • Who is your target audience?
  • How many of those do you already have, who know and trust you?
  • What are your favourite clients paying?

Test and adjust

With time, you will see what types of products/services seem to fly off the shelves (maybe raise pricing there) and what you just never seem to shift (maybe the value isn’t clear enough?). You can also ask your clients and prospects advice – say “We’re bringing this new version of our XYZ product to the market and thinking to charge X or Y. In your experience, does that sound right? What service/add-ons would you expect to be included? What would make it a complete “no-brainer”? I find clients/people are flattered and happy to be asked and more than willing to give their take on things. Their thoughts could be the key to help you customise your offering and improve sales as a result!

Tagged in:
  1. Business
  2. money
  3. pricing
  4. sme

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