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Posted in Business

Price adjustment

Setting a price for goods and services has always been difficult for small businesses. Small business owners find coming up with a price to be one of the most difficult decisions they face and there is no magic formula, firm rules or ideal method for setting prices, but there are many pointers that can help. It’s about discovering, through careful consideration, a reasonable price for your products and services.

Pricing is also a critical marketing decision. The price at which you sell your goods and services is also a key factor in determining the amount of profit (or loss) your business will generate.

So at what price should you sell your goods and services? There are a number of factors that influence the price you charge.

These include:

• your costs

• your target market

• its objectives

• your marketing strategy and marketing mix

• competitive prices

• the level of demand for goods and services

• market conditions and trends

The correct price is often influenced by a combination of these factors and you should only set your price after carefully considering all of the influencing factors. A deep understanding of your market is required through accurate research and effective planning and control.

Pricing is an ongoing process as your market is continually changing, you need to adapt to this changing market. Part of this process is to periodically review your prices, are they still appropriate in this changing market?

Small businesses often don’t pay due attention to their prices. Problems that can occur as a result of this inattention include low margins on products and services, losses on specific products and services due to inflation, and the inability to re-price.

It could also mean the difference between making a profit and a loss. Subscribe to the UMACS Business Zone monthly newsletter, which provides you with great tools, tips and ideas on how to run and grow your business. Subscribe now and receive a FREE e-book “Relationships that Demonstrate the Health of your Business”. www.umacs-business-solutions.com/umacs-business-zone.html

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