Making profit from your product or service is the ultimate goal, right? But a lot of the time as a start-up or small business you can often lack confidence in your pricing and ability to pitch the quality of your work.
First things first, know your market, what’s the average price for your product or service in your market area? 2. How much do your competitors charge? See what your opposition is charging and then make a decision to match or beat them depending on the quality of service you provide. 3. Make sure all your costs, direct and indirect are covered in your quote.
Here is a great place to start, remember the four P’s:
It’s always good to know the value of your product or service and offer your customers a fair and respectable quote, keeping into consideration the quality of the service you will provide over the amount of time or effort required. Quality of quantity! This is what will bring your customers back. While this is important, it’s also worth noting that staying open minded and up to date is a must. Your prices may need to increase or decrease from time to time depending on your competitors, the demand of your market, or even a change in your customers.
If you have difficulty figuring out the quality of your pricing, follow the Quality Pricing Model to point you in the right direction.
The golden rule is to be fair, consistent and transparent.
Five key pointers:
- Quote quickly (within 48 hours)
- Quote for solution provided not time required
- Have clear terms and conditions
- Be open minded
- Keep it simple
Pricing formulas often vary significantly depending on the industry and services offered. Below, we present five examples of how pricing can be formulated across different sectors and services.
- Accountancy - For accountancy services, pricing typically revolves around an hourly rate based on the accountant's experience and qualifications. Additionally, specialised services such as tax preparation or financial consulting may incur additional fees. This approach allows accountants to charge based on the complexity of the work and the expertise required, ensuring fair compensation for their services.
- Marketing - Marketing services often utilise project-based pricing, determined by factors such as the scope of work, complexity, and expected outcomes. This approach allows for flexibility in pricing based on the specific needs of each client. Marketing agencies may offer retainer agreements for ongoing services or performance-based fees tied to predetermined metrics or objectives.
- IT Professional Services - Pricing for IT professional services typically follows a tiered structure based on the level of technical expertise and the range of services offered. Subscription-based models or pay-per-use plans may be available, allowing clients to choose the pricing option that best fits their needs and budget. This approach ensures transparency and scalability for clients while providing a steady revenue stream for IT service providers.
- Coaching - Coaches often offer package pricing for coaching sessions or programs, with tiered options based on factors such as duration, frequency, and additional support services. This allows clients to choose the package that aligns with their goals and budget, providing value and flexibility. Coaches may also offer discounts for clients who commit to longer-term coaching engagements or refer new clients to their services.
- Health Services - Pricing for health services typically follows a fee-for-service model, where clients pay for consultations or treatments on a per-visit basis. Health practitioners may also offer package deals or memberships for ongoing care, providing incentives for clients to commit to regular appointments and treatments. Discounts may be available for clients who purchase multiple sessions upfront or enroll in a membership program, encouraging loyalty and repeat business.
If you are looking for business support to start or grow a young business and you are a UK based entrepreneur or a student or graduate of Birmingham City University, we invite you to apply for STEAMhouse Business Incubator membership. Please send us an enquiry and we will contact you to discuss how we can help.
