How To Set The Right Pricing Strategy For Your Business [Infographic]

One of the most common reasons startups fail is due to issues with cash flow. You’ve likely heard the story many times before: a promising up and coming business with tons of funding eventually goes bankrupt. As an entrepreneur, it can be hard to determine how your customers value your products or services, and price appropriately — while making a profit. However, it’s essential that you thoroughly consider your prices, as the pricing strategy you choose has the power to keep your business alive, differentiate you from competition, brand your company, and acquire new customers.

How To Set The Right Pricing Strategy

The first step to determining your pricing strategy is to determine the costs to run your operation. With a finite goal profit in mind, subtract your costs to arrive at a price range for each project or product. This is a great way to ensure that you’re not only making enough money to cover your costs, but enough to turn a good profit.

Next, it’s important to conduct thorough market research before moving forward on any pricing strategy. That’s because of how you price your product ultimately isn’t about you and your money at all, it’s about your customers. So get to know the space in which you’ll be competing and what buyers expect. Analyze the price points of your competitors and figure out what you offer that they don’t. Appealing to your target audience, or expanding into a new one is a great way to give your business a better chance at success.

For help deciding which pricing strategy is right for you, check out this infographic by Fundera: