How do I put a price on what I sell?

Some entrepreneurs are nervous or embarrassed to ask for the price they want. They know the cost of the raw materials and the daily expenses, and thanks to the Internet, their customers probably know that, too. But, our customers don’t pay us for our time or our raw materials, they pay us for turning those things into value for them. As the joke goes, the plumber doesn’t charge for the 10 minutes it took to fix a plugged toilet, she charges for knowing how to courteously unplug it in 10 minutes.

Selling a product or service is an exchange of energy,and we use price as a shortcut to judge the value of that exchange. As buyers, we sometimes get lucky and get great value at a low price. But, we usually assume a low price means low quality.

Sometimes low quality is all we need. If you’re buying a scoop for the cat litter, the dollar store is probably better value than a high-end cook’s store. But if you’re buying a wedding present, you might make a different choice. As the seller, when you set your price, take into account the expectation of value you are setting.

Finally, despite our famous Nova Scotian frugality, there is no shame in asking for what you want or need to charge. You need to be your own financial planner and take care not only of your immediate needs, but your future as well. As an entrepreneur, there are no benefits, no pension and no sick days. Planning to make more than you need right now isn’t greed. It might mean the difference between being able to pay the bills and buy the groceries when sales slump for a while and having to declare bankruptcy. It might mean your suppliers don’t go bankrupt, you can create jobs in your community and the local charity will get a little bit more in its annual campaign.

So, take action this week to rethink your pricing. What value is your customer getting? Have you quickly solved a problem for them that would take hours or weeks of their own time to solve? Have you given them a solution they’ve never thought of before? What is that time worth to them? What is your price telling new customers about the value they can expect? And what do you need to put away for the future? How can you plan ahead now so your sales cover those costs?

Vickie Gray is the Learning Manager at the Acadia Entrepreneurship Centre. The AEC is proudly located in Bridgewater, Hubbards, and Wolfville. Visit her online at www.acadiaentrepreneurshipcentre.com or call 1-877-232-2723 or 902-543-1067.