When they're first starting to get new products or services off the ground, many small business owners may not know exactly how to price them as a means of making them a big hit in their local markets. The problem, experts say, is that there are no simple answers to this kind of question.
This kind of issue can be a real balancing act, because owners will have to find the right price point that makes sure they are turning enough of a profit while still ensuring that consumers are going to be interested in the offering, according to a report from the New York Times. For instance, if a price is too high, it might become a turnoff, and be unpopular with both current and prospective customers or clients. On the other hand, if it's too low, that can be somewhat damaging to a company's bottom line because it hurts revenues and profits.
One way in which owners can roll out their new products or services while making sure pricing is competitive is to poke around their industries and see what similar offerings are going for when sold by their competitors, the report said. This might serve to inform such a decision, by outlining a price range in general, and then allowing the owner to consider exactly where in that range their prices should fall.
Some turn to technology
Of course, that can be time consuming and difficult to complete, particularly if prices from larger competitors are so low that they can't reasonably be matched, the report said. Fortunately, some software options exist which are designed to help owners avoid having to make these decisions at all, the report said. By inputting some basic data about costs, such programs can tell a company exactly how to price their products.
Owners who are worried about their abilities to complete these kinds of efforts properly, as a means of best ensuring their success on a local level or beyond, might want to think about other ways in which they can improve their companies bottom lines. For instance, looking into the ways in which small business insurance costs are impacting the company might go a long way toward shoring things up. Shopping around for workers' compensation insurance or general liability insurance can save companies thousands of dollars per year.