Profit and Pricing
There are two things you need to know if you are ever going into the Shark Tank or just simply running a small business. You need to know your profit and your pricing. We are huge fans of the show S and in our house we make predictions at the start of the pitch if we think the company will get a deal or not. Inevitably the people that don’t know their numbers are the ones that struggle the most.
Cause and Effect of Pricing
If you are not priced appropriately it will directly effect your profit. Before adjusting the prices for your goods and services, you need to determine how many hours each client or project requires. You need to also start listing your cost of goods in regards to each project and operating costs for the whole year.
Emotional Pricing
The second step of looking at profit and pricing has to do with emotions. Are you pricing your services based on an emotional response of fear or have you pulled a random price out of the clouds because that is what everyone else is charging? Here is a secret . . . you can’t charge based on emotion for very long because it doesn’t make sense and financially it will eventually leave you in the red.
Pricing for Profit
So now that you have assessed what your costs are and if you are emotionally setting your price or not, you are ready to price for profit. Set aside what others are doing and do what is right for you, your business, and your clients.
