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The Price is Right?

Once you know your expenses each month you can figure out how much to charge for your product or service to make enough money. As you think about what your fees will be ask yourself:
  • What is the lowest price you can sell this product for and still make a fair profit?

  • What it the highest price you believe you can sell this product for and still attract customers?

  • What price do you believe will bring the most sales to your business?
When you think about the profit you make on your product, remember that it has to be large enough to cover the cost of goods and your time and labor. In addition, there has to be enough profit on each unit so that the number of units you sell in a month or year will cover your operating costs. If you have a service, instead of units you have to think about how much to charge by the hour or day.

After you set a price for you product or service, be sure to test it. Will the price and the number of units you plan to sell provide enough profit to cover all of your costs? Will customers find this price attractive, or are you way out of the ballpark?

Try our pricing tool below to get an idea of what the right price for your product will be. Take a look at your monthly and startup costs and type in the revenue you will need each month in the revenue goal box. Then set how many units of your product or service you think you can sell each month and the tool will tell you the minimum price you must charge to meet that revenue goal. When you've settled on a price that you think works add it to the spreadsheet you've been working on.