Many factors must be considered when developing a pricing strategy for a home-based business. Pricing decisions should be based on an orderly analysis rather than on an educated guess. By taking a systematic, step-by-step approach, you can make pricing a simple task.
Pricing products and services is a challenging process for most new home-based business owners. Often entrepreneurs will underestimate the value of their time and expertise and find it difficult to believe that customers will actually pay the price they need to charge to make a profit. The bottom line of any business is profit. If a business is going to be successful and maximize profits, accurate pricing is critical.
Prices must be high enough to cover costs and earn a reasonable return, yet attractive enough so customers will purchase the product or service.