work at home, women in business, resources for small business

How Should I Price My Products/Services?

This is part 1 of a series on selling your products or services.How Much Is It?

When it comes to pricing your product or service for your home base business many of us don’t have the time, money or patience to do extensive market research. So what do we do? We just figure that we’ll charge less than or the same as competitor’s. The problem with that is customers often equate quality with price and you could be doing yourself a dis-service.

Many people understand the psychological affect that price has on buyers, so they will over price their crap, sorry…low-quality and inferior services to get people to buy.

Even though I understand price perception I’m still willing to offer my coaching fees for a very low investment. The market that I serve, new home base businesses, appreciates it. The work at home, new start-up, small business moms who follow me know that I’m qualified, competent and consistent in the results of the clients that I coach. No hype, just results. So I’m willing to deal with the mis-perceptions some may have. I’m trusting that others are like me; we can differentiate between quality and hype.  So far so good.

Three things to consider when pricing your product or service.

  1. You must consider marketing expenses, operating expenses, the amount of profit you want to make, self-employment and income tax along with the cost to make or buy what you sell.
  2. You must consider the amount that customers are expecting to pay-example: customers expect to $xx for a virtual assistant. Because there is so much competition from craigslist, odesk, elance, overseas and others many are not willing to pay more than that.
  3. You must consider your non-billable time- For example: you charge a client $50 an hour but spend 1-2 hours working on his stuff before you’re ever face to face with him.

What did you use to determine the right price for your service or product?

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To Our Mutual Success, Lady T



7 Comments
  • Regina Baker
    February 20, 2010 at 5:56 pm

    Considering price was definitely priority when we started our service. Having a service targeting the work at home mom community had to be ‘priced right’ or else it wouldn’t work for them. I always say quantity is not as important as quality and because that’s the route we took, we now have stability in terms of monthly residual!
    .-= Regina Baker´s last blog ..Wahmcart Featured on CNN 650 Radio News =-.

    Reply
  • Wendy Wood
    February 19, 2010 at 6:06 pm

    Great post. I especially like how you pointed out the three things to think about when determining what to charge for your services. In the past I have been guilty of not charging my clients for my non-billable time. Some clients need an extra helping hand which could require additional emails, phone calls, etc. this time can really add up, so it’s very important to factor in those things.
    .-= Wendy Wood´s last blog ..Nicole Dean Mini Site =-.

    Reply
    • Lady T
      February 19, 2010 at 10:30 pm

      It is so important and many of us don’t think about it on the front end. We just know we feel resentful and taken advantage of and a lot of the time we really can’t spot the problem.

      Reply
  • Erica Cosminsky
    February 19, 2010 at 4:21 pm

    One of the best piece of advise I received when I first started out was “Don’t under-price yourself. There is always someone willing to go lower and price themselves out of business.”

    Once I realized that taking cut-rate work just to have some work was a terrible practice because it left me no time to work on finding my ideal clients. I did go 2 weeks without any work but when the work started rolling in, I more than made up for not working for 2 weeks.

    There is also a particular kind of client that new start-up owners must be aware of and these are the ones that KNOW you haven’t figured out how to price your products. They usually are very demanding and trying to take up all your time because as leeches don’t want to let go of the good deal they found.

    Reply
    • Lady T
      February 19, 2010 at 10:38 pm

      We must get clear, understand the pitfalls (and leeches), make a decision about what we want and then stick to that. Erica, I’m glad that you got clear on what the problem was and was willing to go a couple of weeks without.

      Reply
  • Cindy Bidar
    February 19, 2010 at 12:17 pm

    The hardest lesson for me to learn was to STOP trying to compete with all the “race-to-the-bottom” types on Craig’s List, eLance, and odesk. Service providers seem to think if they set a fair price for their work, they won’t get any clients. But I can tell you that’s just not true. There are people out there who are willing to pay for quality work, but they’re not looking for you on Craig’s List.
    .-= Cindy Bidar´s last blog ..The Neverending List of Blog Post Ideas =-.

    Reply
    • Lady T
      February 19, 2010 at 1:13 pm

      Cindy I’m glad you got the vision! Yes, we are all looking for top quality work with as little stress as possible. If you can prove that you provide quality and the customer doesn’t have to stress with language,time or customer service issues then you will get paid whatever you ask for.

      Reply

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