Pricing products and services is not one of the easiest tasks in the life of an entrepreneur. In order to establish a fair and competitive price , many details need to be analyzed and agreed upon, which ends up generating countless doubts for owners of micro and small businesses.
Two distinct aspects, known as marketing and financial, need to be taken into account when determining a sales price that meets the needs of the entrepreneur and the consumer. The first is based on the calculation of costs and expenses, and the second on the analysis of the segment of activity, customers and competition. Together, they provide the balance that the pricing process requires and ensure that the values stipulated are both attractive and profitable.
Check out the following 5 steps considered essential for defining a fair selling price and which can be applied to both products and services.
Content
1. Cost assessment
2. Assessment of expenses
3. Taxation
4. Estimate your desired profit
5. Keep an eye on the market
1. Cost assessment
To begin with, it is necessary to be fully aware of all the costs involved when a product or service is offered on the market. In the case of companies that sell their own manufactured items, all costs with raw materials, for example, need to be accounted for. In businesses where products are outsourced, what needs to be taken into account is the acquisition cost. For companies that offer services, the labor of the professionals involved is the main factor that must be assessed by the entrepreneur.
2. Assessment of expenses
When assessing expenses, those considered fixed, such as rent, electricity, internet and employee salaries, for example, are the first to be accounted for when determining the sales price. As the name suggests, this type of expense will be generated every month, regardless of the number of products or services sold. It is also necessary to take into account variable expenses, that is, those that vary according to customer demand, such as fees for transactions via credit and debit cards and packaging costs, for example.
3. Taxation
Understanding the tax system your company falls under is the starting point when it comes to taxation, since there are significant differences between the three available modalities, known as Simples Nacional, Lucro Real and Lucro Presumido. In addition, knowing all the taxes that canadian ceo email list affect the gross sales price of products, such as ICMS, for example, and ISS, in the case of services, is important so that the delimited value can cover this type of cost.
4. Estimate your desired profit
Including the desired profit margin when selling products and services is essential for entrepreneurs to see the expected return on their business. The profitability rate must be fair, without exaggeration, and must be calculated individually, i.e., each product or service has its own profit margin, which is normally around 15%.
5. Keep an eye on the market
After taking into account all costs, fixed and variable expenses, taxes and profit margin, it is important to look at the market and observe how the main competitors behave. This is an attitude that helps to guide the sales price adopted by your company and understand if there is a need for adjustments. It is worth remembering that this market analysis should always be guided by the way the entrepreneur wants to work. Having a competitive price is important, if the choice is to enter the competition based on price. However, if the appeal of your company is to become known for its ability to differentiate, the prices charged may differ from the average charged by competitors.