Pricing Yourself to Get and Stay In Business Home Business Articles | October 9 Wholesale Nike NBA Jerseys , 2002

Pricing Yourself to Get and Stay In Business ? 2002 Elena Fawkner It goes without saying that the bottom line of any ... business is profit. Don?t make a profit and you won?t be in business for

Pricing Yourself to Get and Stay In Business

? 2002 Elena Fawkner

It goes without saying that the bottom line of any successful
business is profit. Don?t make a profit and you won?t be in
business for very long.

Making a profit is pretty simple really.

You just have to make more than you spend. The trick is to
know how much you have to make to exceed what you spend.

And you spend more than money when running a business.
You spend something infinitely more valuable. Time. And,
as we all know, time is money.

To maximize profits, accurate pricing is absolutely critical.
Your prices must be high enough to cover costs and enable
you to earn a reasonable return but low enough to remain
attractive to prospective clients.

New entrepreneurs often have difficulty accurately pricing
the value of their time and expertise. Some take the approach
that they can work cheaply because they're fast and they?re
prepared to take any work, now matter how low-paying Wholesale Authentic NBA Jerseys , to fill
in the time between more lucrative assignments.

For this group, the mindset appears to be that any work is
better than no work. Although this may seem reasonable when
you're first starting out and you just want to make your
mark as early as possible, the downside is that this short-
sighted approach can create in customers a ?cheap?
mindset that is difficult to shift once the business becomes
established.

Another group of entrepreneurs, though, takes the approach
from the outset that they are worth top dollar and demand
fair pricing for the value they provide and won?t accept anything
less. This group appears to be more successful than the
former in the longer run. Sure Wholesale NBA Jerseys Free Shipping , they may find it slow to start
with. After all, they are new in town, they can't rely on
repeat business and they can't ride the wave of their own
impressive reputations. But by setting the bar high to start
with, when their businesses DO become established, they've
set the tone and their businesses usually have a firmer
foundation for it.

This article looks at the fundamentals of pricing for the new
home-based business entrepreneur.

BASIC PRINCIPLES OF PRICING

Here are some basic principles to keep in mind when
considering your pricing strategies:

=> Prices must at least cover costs.

If you don't at least cover costs Wholesale NBA Jerseys From China , and this includes an
amount for your time, you will incur a loss. If your business
is incurring a loss it's a hobby.

=> The best way to lower price is to lower costs

As price equals costs plus profit margin, it's obviously better
to reduce the cost element than the profit element if, for any
reason, you find that you must reduce your prices.

=> Prices must reflect the environment in which they operate

Any price Wholesale NBA Jerseys China , whether yours or your competitors', necessarily
reflects the dynamics of cost, demand, market changes,
competition Wholesale NBA Jerseys , product utility, product longevity, maintenance
and end use.

=> Prices must be within the range of what customers are
prepared to pay

It's all very well having the best bread slicer in the western
world but if your price is more than customers are prepared
to pay for it, so what? On the other hand, there is absolutely
no reason to charge less than customers are prepared to pay
either.

=> Prices should be set at levels that will shift products
and services and not to beat competitors alone

It's easy when you start delving into all of the sophisticated
analysis and research around about optimum pricing levels
to forget that Wholesale Authentic Jerseys , at the end of the day, you set your prices as
high as you can while still shifting your products and
services. So don't think that keeping pace with competitors
is enough. It isn't. You may have competitive advantages
that mean you can charge more than your competitor.

=> The price you set should represent a fair return for your
time, talent, risk and investment

Don't be coy about demanding a reward for what you
bring to the table. Your expertise and talent has objective
worth. Don't just give it away. Charge for it.

PRICE = COST + PROFIT MARGIN

The basic price you will strike is simply your costs plus a
profit margin. It follows that before you can set your prices
you must know exactly what your costs are. Costs fall
into three main areas:

=> Direct Costs

Direct costs are those things directly related to the creation
of your product such as raw materials, parts and supplies.

=> Overheads

Overheads are business costs not directly related to
production and include things such as taxes Wholesale Jerseys China Free Shipping , rent, office
supplies and equipment, business related travel, insurance,
permits Wholesale Jerseys Free Shipping , repair of equipment, utilities (electricity and
telephone) and professional advice (accountant, lawyer).

=> Labor

Labor costs include all wages paid to employees *including
yourself*. It's amazing how many home-business owners
forget to include their time as a cost of business!

Calculate your labor costs by multiplying the number of
hours worked by an hourly wage. You should also include
fringe benefits (typically 15% plus).

Once you have ascertained your total costs, add a profit
margin. A 15-20% profit margin is standard for most
home-based businesses. Alth . Cheap Jerseys From China   Cheap Jerseys Wholesale   Cheap Jerseys Free Shipping   Cheap Sports Jerseys   Cheap Sports Jerseys   Cheap Jerseys Free Shipping   Wholesale Jerseys China   Wholesale Custom Jerseys   Wholesale Custom Jerseys   Wholesale Jerseys From China