All right, the time is drawing near; it's almost time to open the doors and become a real
live business performing real services. Don't get ahead of yourself just yet. There are a few
more pieces to this puzzle that we need to address. Soon, very soon, you'll be sitting back
watching the orders pour in, but the real success will be in the details.
For example, how much are you going to charge? This is going to be up for debate as long
as you own your business, and take it from me, it is a question that you'll ask yourself as
you progress in the years to come. There's a fine line between charging too much and los-
ing business versus charging too little and losing profits.
While we're looking at pricing, let's also take a closer look at the services you are provid-
ing. Are you offering a full line of services that is broad enough to make an impression?
If you focus on a niche, and I recommend that you do, make sure that you're covering the
entire niche and not just a single product. Remember that success will be in the details and
the finesse that you develop might only come with time and practice; however, let me give
you some advice here before you cut the red ribbon and open the floodgates of business.
Determining Your Price
Determining your price can also be described as your “pricing strategy,” which can be af-
fected by many outside influences. As a business owner, you're going to want the most
money for your work; you're really worth the price you're charging, right? Or are you?
With most new businesses this topic is a great challenge. We're going to take the logical
step, and before we can determine which retail pricing strategy to use in setting the right
price, we must know the costs associated with your services. The two main categories in
factoring your service costs are the cost of goods (inventory) and the amount of operating
expenses (your salary).
The cost of goods includes the prices paid for the parts that you will use in performing the
services that you are offering, plus any shipping fees associated with the delivery of those
parts. The cost of operating the business, or operating expenses, includes overhead, payroll,
office supplies, marketing, and other business-related expenditures.
Regardless of the pricing strategy used, certainly don't go by what you “feel” will work,
because the selling prices (the prices you will charge your customers) should more than
cover the cost of obtaining the parts plus the expenses related to operating the business.