by Marshall » Fri Apr 19, 2013 5:29 pm
Hello Darc,
I'm not sure if this is the appropriate forum for that question, perhaps the Business forums would be a better place.
All the same there are multiple points to consider when developing your price model for your business. Google has tons of great content to provide you with the path that works best for you. Also bear in mind that new services are always becoming available as the internet manages to swallow up more and more sales every year. You need to know what market, local or otherwise, that's going to be your customer audience, and develop all services and prices for those people.
What you need to know before making a decision...
Are you developing your pricing model based on your own audit's for time spent to perform tasks, overhead for software, employee costs, etc.?
Are you developing your pricing model off of competitors prices?
If you want to develop your prices based on statistics you may not like what you find. This however is a very accurate method for determining cost effectiveness of providing a service, and how much profit you will actually retain.
You first need to determine a great number of factors, all of which I will not mention here. What are your costs as a business: Software overhead, Insurance, Employee payroll, Annual services that keep you in business like certifications, Partnership costs, etc. Once you have all your numbers together you'll have to do a bit of math to determine how much money you need to make every year to ensure you stay in business. Project how much you want to make yourself, and any business profits that won't be touched (used for advancing your business, etc.), and you're on your way to discovering just how much it costs to stay in business. I would advise talking to an accountant, or another professional who could handle this kind of request easily, as they will most likely know many more "in's and out's" to keep in mind while discovering how to charge for services. This is a common approach for many businesses, but I don't think it's the best method for a small office just starting out. I would advise you to spend time getting to know your current customer base, and asking them how much they would pay for the services you have in mind.
If you want to undercut your competitors I have a few opinions.
I believe undercutting is not always the solution, as a quality service can sustain itself in a market all on it's own. People may associate your price cuts with your competitors as a cheap way to do business. Your prices at a glance will infer an understanding of your business image as a whole. $20 to completely repair a pc will always sound and look cheap. $400 for complete warranty repairs and 24/7 coverage will always make people know you mean serious business. Bearing these facts in mind, tread carefully when basing prices off of your competitors. This is the method I started my business with, but have since moved away from it as business has grown.
There are ton's of great online apps that can help you keep track of your information. I strongly recommend you do some searching for online survey app's like surveymonkey. I believe it's crucial to know what your customers want to buy, before you try to sell something to them. You may end up undercutting yourself, or providing too much when it is not required.
I hope this is of some use to you.
