Chairlady’s Musings: Let’s Talk Pricing

Pricing a product (or service) is one of the cornerstone decisions you’ll make as a business owner when you start out. Pricing however can bring up a lot of anxiety for business owners. Will my clients be upset? Will I lose clients? Will they understand? Am I putting it up too much or too little? It is easy to fall in the trap of crowd sourcing pricing.

Even though looking at your competition or other established businesses in your field can provide you with a starting point, it is important to remember that each person set their prices according to their own money mindset, personal beliefs and confidence level. One person might believe they are not “worthy” of earning a decent income and that will reflect in their pricing. Individuals have different lifestyle requirements and different expenses to you. Some might also do their business as a side-hustle, where it is a full-time job for you.

For someone like me (a photographer) it was tricky to work out my pricing and I certainly fell in the crowd sourcing trap when I started.  What I have learned over the years is:

Start with the lifestyle I would like to have and what “salary” I need each month to pay my bills (including, equipment replacement, insurances, medical aid, car payments etc), save for my retirement, keep money aside for unexpended expenses and have extra money to enjoy my life. Then from there I worked backwards to how many hours I would like to work a month to achieve that income and how many photoshoots I need to do and at what price, to reach my monthly goal. It is not an exact science, and it takes time to get it (mostly) right.

So, make getting pricing right a priority, especially at the start of a business.