One of the major
obstacles we face in growing our businesses is learning HOW to ACCURATELY PRICE
our product or service to make a PROFIT!
There are several factors involved in making our pricing decisions. Some factors are logical and some are not. Today I want to talk about internal barrier that many small business owners have, especially women.
Trained as consumers from childhood on, we forget that we are business owners and we have to set our prices accordingly. When we set a price. we may secretly think" that's too much too charge and the PROFIT is too HIGH" and we 'lower the the price.
The selling price of the product has to take into consideration, not only the costs of product, (labor, material, transportation,etc) but the costs of running the business and a profit. Without PROFIT the business does not grow and thrive.
Another factor to consider is how women are use to sacrificing themselves and putting others needs first. This often leads to the owner taking a low salary or none at all. I ask my clients if you had to pay someone to do all that you do in the business how much would that be? Usually they laugh and reply, "a good deal more than I pay myself".
Low balling your salary does NOT give an accurate cost of running your business. It does result in two negative results:
There are several factors involved in making our pricing decisions. Some factors are logical and some are not. Today I want to talk about internal barrier that many small business owners have, especially women.
Trained as consumers from childhood on, we forget that we are business owners and we have to set our prices accordingly. When we set a price. we may secretly think" that's too much too charge and the PROFIT is too HIGH" and we 'lower the the price.
The selling price of the product has to take into consideration, not only the costs of product, (labor, material, transportation,etc) but the costs of running the business and a profit. Without PROFIT the business does not grow and thrive.
Another factor to consider is how women are use to sacrificing themselves and putting others needs first. This often leads to the owner taking a low salary or none at all. I ask my clients if you had to pay someone to do all that you do in the business how much would that be? Usually they laugh and reply, "a good deal more than I pay myself".
Low balling your salary does NOT give an accurate cost of running your business. It does result in two negative results:
First, it does not SAVE money It often creates personal cash flow problems. Which in turns creates problems with creditors and family members.
Second, it does not give an accurate picture of what it costs to run the business. And that leads to low ball pricing which leads to no profits and builds stress on the business
It is time to put a "true value" on your contribution to the business and give yourself a raise that is reasonable. If you raise your salary $1,000 a month that translates roughly into $5.00 an hour based on a 200 hour work month. And I know most of you work at least 260 hours a month.
Remember you are a business owner, not a consumer. and its time to put yourself into the equation of success.
Best wishes for a successful and growing business.
JoAnn R. ForresterS.I. Business Associates
412-440-6969
