Creating price breaks and price points is a tricky process, especially when you are first starting out. There are different philosophies behind how to price for your products and services. In the beginning, you may want to start out at a lower price, just to ‘test’ the market and see if there is a client base that you can build for that product/service. If you are an expert in the field, however, you may know there is a niche out there and start out at a medium to high range, so you can get the customer base you are looking for right away. Calculating price points takes practice and know how – you need to know how much you will make per transaction and how much volume you will have coming in.
Continual business is heavily reliant on repeat customers, referrals, strong leads and online reputation. When you are starting out, you may not have all these components yet but you can certainly build up to it. Many times, customers shop based on price alone. When you are working in a specialized field when products and services are customized for the client, you may or may not need those components. One thing is for sure……now matter who you are doing business with, they have to trust you to some level. TRUST is essential.
What are you worth? Over time, you may come to realize that you are charging too little for your services. Often people find themselves charging by the hour and under-calculating how much time a job will actually take. For instance, if you quote someone at 5 hours and it actually takes 10 hours but you value this client and believe this client will give you referrals and repeat business, then perhaps under-calculating the 5 hours is worth your time and effort. It takes experience to learn what makes sense for your business. This is a constant process of balancing what your time is worth.
