How to Price a Product or Service [Infographic]
February 24, 2019
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The following content was submitted on behalf of Fundera.
In a dense market, it can be difficult for your business to acquire the capital it needs and stay afloat. Between branding, sales, and everyday operations, the cash that comes in can quickly flow out. That’s why it’s essential to select a pricing strategy that works for your business. The right strategy will not only help you stay afloat, but establish your branding within a market, and differentiate you from competition. To do this, you must conduct a thorough analysis of your company and the market.
First, if you’re not already aware of your costs, take time to account for these. Add up your expenses and overhead to get a finite number you’ll need to break even. Then set a ballpark number in profit that you’d like to achieve to determine a good price point for your product or service. This will give you a good idea about how much revenue you’ll need, as well as keeping you motivated to reach your goals.
Next, get to know your market. Take a look at the pricing strategies of your competitors, as well as how they’re marketing themselves to their audience. Look at the website, social media, and blogs to determine how they’re positioning themselves and what you can offer that they can’t. Knowing what your audience expects will go a long way towards help you compete.
With a thorough understanding of your market and profit goals, you will be better able to select a pricing strategy that drives success for your business. For more on which pricing strategy is right for you, check out this infographic below by Fundera: