Small Business Development Center at UNM Cyndi Jarvison

SMALL BUSINESS DEVELOPMENT CENTER AT UNM

By Cyndi Jarvison

So you have a great business idea, and you’re excited to get it up and running. Before you invest into getting your small business idea off the ground, you need to set your prices. Pricing structure is one of the most important steps you will take when starting a business. It can also be one of the most challenging ones. Your prices influence every facet of your business, and ultimately, your own personal finances. Before you start pricing your goods or services, there are some things to consider in your strategy:

Experience and Credibility

If your business sells services or products, your experience and expertise should be factors when setting your prices. Someone with proven success in their industry can likely provide more value to a client than someone with no experience. It’s important to be realistic about what you bring to the table. Be confident in your value and consider it when you structure your pricing. Planning for the Future

Keep your long-term plans and business goals in mind as you set your pricing strategy for the short-term. While you can always adjust your pricing in the future, your initial structure must be part of your overall business plan.

Setting prices for your small business idea is an essential step in creating your path to success. Every business has a unique set of factors contributing to its productivity, from your experience and credibility to your service offerings and competitive landscape. As you set your prices, be sure to consider some of the points shared above to ensure what strategy works best for your business. Reach out to your local SBDC to schedule a one-on-one confidential consultation to discuss further or go to our website at www.nmsbdc.org.

The Small Business Development Center (SBDC) provides no-cost, confidential, virtual business consulting to help you navigate the federal COVID-19 programs, start a new business, or expand/improve your existing business. The SBDC will be here to help your business grow and adapt to the changes and find new opportunities in our new economic environment.

Staying Afloat

Create a comprehensive breakdown of all of your operating costs. Setting a clear picture of what it takes to keep afloat, deciding what amount of sales you want to generate with your pricing. More importantly, you need to know what it costs to produce what you are selling.

Cost of Your Services

How many hours goes into providing your work? What business expenses do you incur to achieve your services? These are just a few factors to figure into what you are charging your customers. While you might be able to get away with low prices as you are getting started, you should ensure your pricing structure covers what it takes to at the very least to breakeven. If your pricing doesn’t support that, you’ll need to evaluate why your pricing isn’t allowing you to cover your costs.

For Assistance Contact: Cyndi Jarvison at cjarvison@unm.edu

Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. All SBDC programs are extended to the public on a non-discriminatory basis. Reasonable accommodations for persons with disabilities and individuals with limited English proficiency (LEP) will be made if requested at least two weeks in advance.

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