Establishing a Product or Service to Sell
Fundamentally, a business is defined by its ability to engage in commerce by selling a product or service to others. Determining at what price to sell your product is essential to being able to sustain your business. Even if you have been working in an industry for some time and have decided to start your own business in that same industry, your new start up may be able to charge different prices based on your unique circumstances.
Learning the Basics of Pricing
The SBA, Small Business Administration, offers a 30-minute online course: Pricing Models for Success Business. This course explains different approaches to setting prices, calculating costs, and assessing competitors. In addition, learn the vocabulary used to correctly describe pricing terminology. Some key factors to consider include material costs, labor costs (including salaries plus benefits), and overhead costs (examples of overhead costs include: taxes, rent, insurance, transportation, marketing, etc.).
Research Your Product or Service
Looking back at your business plan will also help you. A business plan includes evaluating the competition and basic industry information. Check out this previous post about Sizing Up Your Market, and utilize SBA’s SizeUp tool to compare your prices to those of competitors’ to better calibrate what prices people may pay. According to an SBA article, small businesses will commonly not charge enough for their services thereby underpricing themselves to the extent that their services do not cover their actual costs.
Additional Dallas Public Library Resources
Visit our online catalog to find resources for check out from the Sammons Small Business Center such as:
Style & Statistics: The Art of Retail Analytics,
Impact Pricing: Your Blueprint for Driving Profits,
Pricing Strategies for Small Businesses,
Sewing to Sell: The Beginner’s Guide to Starting a Craft Business
Also, with a Dallas Public Library Card, you gain access to Lynda.com through the Dallas Public Library Online Databases. Lynda.com includes video tutorials about pricing fundamentals that are offered for all skill levels. Remember that if you come to a Library location to access Lynda.com, bring your own set of headphones to watch, listen and learn from these online course offerings.
