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Learn How to Price Effectively

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Learn How to Price Effectively

By bridgetwpollack, Guest Blogger
Published: September 18, 2013

One of the most important decisions you can make as a business owner, a marketer, an accountant and a business strategist is determining a price for your product or service. The price you choose to set communicates value, market position and customer expectations. From a backend perspective, it also determines the ever-important potential of profit.

If you’re working to develop the perfect pricing strategy for your new product or service or if are re-evaluating your current pricing strategy, take advantage of the free resources offered by SCORE.  SCORE exists to provide expertise that is crucial to helping small businesses make important decisions like pricing determination.

Resource 1: Pricing for Profit: Understanding Gross Profit, Margin & Markup

This online workshop, presented by SCORE mentor Larry Hunt, will set a strong foundation for your pricing knowledge. You’ll learn standard pricing techniques, the difference between markup and margin and how to calculate your gross profit. For existing products/services, this session will teach you how to identify the current stage of your offering’s lifecycle and how to optimally price in this phase.

Resource 2: Pricing Strategies for Small Business

In this article, Janet Attard, a frequent speaker and author on small business issues, addresses important pricing questions like, “What are some ways to find out what competitors are charging to develop your own pricing strategy?” and “When are discounts NOT a good start-up strategy?”

Resource 3: The Total Cost Picture

Are you fully aware of all the factors that should be taken into account in your pricing? SCORE mentor Ashesh Banerjea clearly and concisely lays out all the considerations in this blog post. Also check out Ashesh’s explanation of 5 pricing models.

Setting appropriate and competitive pricing and re-evaluating it on a regular basis are so critical to small business success. SCORE provides free online workshops, articles, templates and blog posts to educate small business owners on this and all business topics. And SCORE mentors provide free one-on-one business mentoring for any issue you are facing in your business. Harness the knowledge of business experts to your best advantage. Connect with a free SCORE mentor today.

About the Author:

Bridget Weston Pollack

Guest Blogger

Bridget Weston Pollack is the Vice President of Marketing and Communications at the SCORE Association. She is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies to facilitate the growth of SCORE’s mentoring and trainings services. She collaborates with SCORE volunteers and develops SCORE’s online marketing strategy.

Comments:

Pricing strategy totally depends upon the backend perspective. Since its a essential part to fix a price basis on current trend & requirement of the market. SCORE has been wonderful job towards enlightening the crowd with its initiative.
Thanks for the information, especially the more detailed linked information. Pricing is key, not too low, not too high, taking into account market power, the structure of the industry, seasonal factors, fixed costs and marginal costs. It is not an easy decision, but a crucial one for any business.
thank for good job
This is an excellent article. Its amazing how many people attempt to start a business without even understanding standard pricing techniques. Having a resource like SCORE to teach you such important this as "the difference between markup and margin" as well as "how to calculate your gross profit" is invaluable.
I think, Must find out what competitors are charging to develop your own pricing strategy

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