Once you know your expenses each month you can figure out how
much to charge for your product or service to make enough money.
As you think about what your fees will be ask yourself:
What is the lowest price you can
sell this product for and still make a fair profit?
What it the highest price you believe
you can sell this product for and still attract customers?
What price do you believe will
bring the most sales to your business?
When you think about the profit you make on your product, remember
that it has to be large enough to cover the cost of goods and
your time and labor. In addition, there has to be enough profit
on each unit so that the number of units you sell in a month
or year will cover your operating costs. If you have a service,
instead of units you have to think about how much to charge
by the hour or day.
After you set a price for you product or service, be sure to
test it. Will the price and the number of units you plan to
sell provide enough profit to cover all of your costs? Will
customers find this price attractive, or are you way out of
the ballpark?
Try our pricing tool below to get an idea of what the right
price for your product will be. Take a look at your monthly and startup costs and type in the revenue you will need each month in the revenue goal box.
Then set how many units of your product or service you think
you can sell each month and the tool will tell you the minimum
price you must charge to meet that revenue goal. When you've
settled on a price that you think works add it to the spreadsheet
you've been working on.
