SIR Roundtable – April 2010
Pricing Your Products & Services
After introductions, Bill Smith began the session by asking the table to introduce themselves from a business standpoint.
- Introducing yourself and your business in a succinct, professional, and informative way is an important facet to the representation and success of your products and services.
- In conjunction, pricing your products and services is one of the most important business decisions you will make.
How to price your products and services
- The first step is to determine your overall costs: business and office expenses, salary and personal taxes, benefits, etc…
- Next, calculate your sell-able time. How much time do you have to sell? It is typical to over-estimate your sell-able time. To be safe, you can start with calculating forty working weeks per year and six billable hours a day. This results in 1,200 sell-able hours a year.
- To calculate your basic hour rate, divide your annual costs by the number of sell-able hours.
- Keep in mind that as much as a quarter of your working time may not be reimbursed due to overhead time, marketing, seminars, meetings, etc…
- You might find that you need to charge more or less, but this is a good foundation to determine your pricing and understanding your value.
What is your competition charging?
- Start asking around. Find out what your fellow professionals charge.
- Remember that there will always be someone who can beat your price, but what you should really compete with is value!
- Clients are more willing to pay a fair price for a superior product or service than pay a cheap price for an unreliable product or service.
Correct pricing helps produce profit.
What is your biggest challenge when it comes to pricing?
Next Roundtable Meeting: Wednesday, May 12th, 2010
Topic: TBD
Facilitator: Bill Smith
