HOW TO SET PRICING FOR YOUR SMALL BUSINESS

HOW TO SET PRICING FOR YOUR SMALL BUSINESSWhether you’re fresh to small business entrepreneurship or an experienced manager, when you’re starting a new small business, setting the correct prices for your goods and services can be of crucial importance for your business endeavor. One of the secrets to business success is knowing how to price your products properly. This can make all the difference between whether you succeed or fail. As Charles Toftoy, associate professor of management science at George Washington University eloquently puts it, this skill is “part art and part science”. With that in mind, below are a few guidelines for pricing your goods and services correctly.

Know the Key Factors

First and foremost, before setting a price for your product, you have to make sure that you know the costs of running your business. If the final price doesn’t cover the inflicted costs, you will lose money – at this point, it simply becomes a question of time before your business fails. When you calculate all the costs of production and marketing, the most straightforward method is the cost-plus pricing, which simply means that you must add the percentage that represents your desired profit to total running costs (such as labor, materials and overhead costs), and that’s what you charge to your customers.

It is important to know that, when it comes to small business pricing, there are no fixed rules. Even though the science of economics enumerates many different methods of pricing, the way you charge for your goods and services ultimately depends on many different factors, such as target customers, the prices of your competitors, and the complex relation between quality and price. All this is good news, because it means that you’ve got a lot of flexibility in setting your prices.

General Advice & Important Questions

What are your competitors charging? This is a key question. If you charge too much above the market price established by your competitors, you risk a swift failure. On the other hand, if you set your prices too low, you can start a “price war” and ultimately generate profits that are much lower than they could be.

Remember – never try to compete with large store prices. These stores by their goods in large quantities; consequentially, their price-per-unit is much smaller than a small business owner could hope to achieve. When competing with these stores, do not try to beat them in terms of quantity and pricing. Instead, focus on things like quality and customer service.  Here is a video showing you why you shouldn’t compete on price.

What is the current state of your market and the overall economy? The situation on the market is always changing, and you must be familiar with the changes in your industry and the economy as a whole when you plan new products and services. It is imperative that you understand the marketplace so that you can continue to make correct decisions.

Dealing With Neck Pain

dealing with neck painIf you’re like many people who work in an office all day long, one of the things you will suffer from is neck pain.  Sitting and looking down at a computer screen all day long is not a natural position for us to be in for long periods of time so naturally pain follows.  While chiropractic care or massage therapy can help, neither are exactly on hand throughout your day so here are some tips for dealing with neck pain.

Sleeping

Sleeping awkwardly or in an uncomfortable position will only make it worse.  We have all woken up with a sore neck at one time or another after sleeping in the wrong position.  Sleeping in the wrong position puts more pressure on your nerves and exacerbates the pain.  Getting yourself a neck pillow can correct your position as you sleep.  Pain is often caused by the way you sleep and the pressure you put on your neck and spinal nerves.

Self Massage

While a professional massage will help tremendously it is not always possible and you can alleviate some of the pain and tension yourself.  Use your fingertips to reach behind your neck and massage in a circular motion, use your index or middle finger since they can provide the most pressure.

You can also use your knuckles to help take the knots out of your muscles.  Using a gel or while you are having a shower can help with the massage and not leave you with irritated skin from rubbing it.  Make a fist with your hand and rub your knuckles down along the sore muscles in your neck.

Stretching

Stretching your muscles isn’t just for after workouts, you should be stretching your muscles throughout the day and make sure to include your neck.  You can combine stretching and massage, while you are in the stretch position you can massage your muscles and this will help with knots that are hard to relieve.

Heat & Ice

The first thing you want to do is relieve any inflammation you have and putting ice on it for 10-20 minutes will help with the swelling.  Reducing inflammation takes the pressure off the nerves.  More often than not ice alone will help improve your neck pain.  Heat on the other hand will help relax the muscles and it is great after a workout.  You can get an ice pack that functions both hot and cold, you simply pop it in the microwave when you want a hot pack.

This should help you in dealing with neck pain while at home, if the pain or discomfort persists then always, always check in with your physician.