Often a new business or sole proprietor does not have the ability to find the best prices that are reasonable and understandable. Comparing your prices to theirs doesn’t always work, because you don’t know the reasoning, rationale, and business plan that led them to create your specific price point. Of course, you can’t charge just any price, so there must be a logical way to find out exactly what that price is.
And no, selling too low is not a good way to start! Oil of Olay started out with large jars of their specialty cream at a very low price. When that didn’t sell, they changed it to much smaller bottles and at a much higher price. As a result, their products flew off the shelves and made the company a lot more money.
Put the value of yourself and your business in the price. With a focus on your expertise and experience, asking questions to discover what your prospects need and want, you may find that the ideal price for your product or service is far above what you originally expected.
Just because someone makes $40 an hour, or in the case of therapists $100 an hour, doesn’t mean they have a lot of money to spend. With higher salaries also come higher taxes, and with business ownership also come very high business expenses. Included in your price should be: tracking and support services (which have recently been widely neglected and in doing so caused a great deal of dislike in many businesses); organization and systems to make your business not only more profitable and productive, but also the daily maintenance to keep things running; workers, managers and teams of people; new and improved products as they become available; marketing and publicity; research and technical development; and finally, research on past, current and future trends and research for product improvement and innovation.
Get good at handling money. Of course, paying bills can cause some stress, especially for new business owners, but stress is actually the wrong response to bills. Once you’re in firm control of the money, knowing what you’re earning and what you’re spending, that early trading stress will subside dramatically.
Too many companies have no plans or visions for their future. You need to price your products or services so that you can meet your goals and future plans, so that you can fulfill that vision, and so that you can use that money to further improve your business.
Sliding scales are often too confusing, and too often inconsistent, too, so they really shouldn’t be used by startups. Most of the time, people buy from you because they need some kind of help, and you are the one who can solve their problem or fulfill their need. Yes, that means they want help and solutions more than a low price.
Instead of discounts, it is often much better and more incentive to offer a rebate with the purchase or a payment plan for the full price. In that way, you are offering support and alternatives that would benefit both you and your customers.