Pricing your service based business BUSINESSIDEAINSIGHT.COM Mike Nesselbeck Pricing the services is very important
first step because we need to under-
and going above and beyond what
as you want to make sure you can
stand what is the competitive
your customer’s expectations are.
cover all your expenses. You also want
landscape, how much are they
to make sure you’re not underpricing
charging, what type of value they’re
Charging lower than competitors
yourself and leaving money on the
bringing to that target market and
Similarly, you want to make sure
table. Or conversely, you’re overpricing
where they position themselves in
you’re not undercutting and underpric-
your services and scaring away the
relation to your side business. This will
ing yourself and leaving money on the
potential market and target customers
also give you a good understanding of
table. If you’re only charging 100 to
because your price is too expensive.
the general baselines of where you
200 dollars for your service, but your
It’s really important we focus and
need to price your services.
competitors are charging a thousand to two thousand dollars and only
spend some time on how to price your service, ensuring you do it correctly so
Charging higher than competitors
giving the similar level of value or less.
you don’t have to keep flip-flopping
For instance, if you notice that your
Well, you know that you’re underpric-
and changing your pricing down the
competitors are offering a lot less
ing, and that you have a lot more
road, as that will scare away your
value, personalized service, etc. than
room to increase and grow in your
long-term customers.
what you offer. Well, you can consider
pricing. And conducting the competitor
charging a higher price point than
analysis will give you a good baseline
Step 1: Competitor Analysis
your main competitors in that area
so you know where to start.
The first step for pricing the services
because you know you’re offering
for your business is to conduct a
more value, that personalized support,
competitor analysis. Now, this is the
or whatever it is that’s really helping
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MBE BUSINESS MAGAZINE OCTOBER 2020
Step 2: Estimating the Value You Bring W W W. M B E F O RYOU. C O M
