How to Price Products and Services

Pricing your products and services is one of the most important aspects of your business. The way you price your products and services will have a huge impact on the amount of profit you make. Although selling products and services al la carte is an option there is more of a benefit when you sell them as a package. There are two major benefits of packaging your services; it is a greater return on investment and longevity.

For example:

If you are a service based business and you are sell consulting services. There are several services you can offer your clients such as web design, project management, business coaching, etc. By packaging these services you will be able to work with your clients for a longer period of time and ensure they’ve receive the best results. Packaging allows you to work with clients on a contract basis versus month to month.

Here is another example:

If you are a career coach and your potential client needs assistance in finding employment. It would be best for you to offer the client a package of possibly 3 months, which would include interview prep, a resume and cover letter, job search assistance, and job placement. This way you will package those services for a fixed monthly fee instead of servicing and charging the client with a ton of separate services.

Below are steps to properly price products and services:

1. Know the value of your products and services
   1. What are you offering that would make consumers want to buy into you?
2. Set an income goal
   1. How much profit do you want to make?
3. How much money do you need to make per month to cover all of your personal expenses?
   1. Think of a magic number…
4. Calculate the pricing formula
   1. Cost of Goods Sold + Labor/Time + Profit Per Client =Price

Now that we’ve gone over how to price your product lets talk about how to package.

1. Create a 3 package model
   1. High – This package will be the highest investment of the three and will provide the client with more bang for their buck. It will have the most value.
   2. Medium – This package will have a lower investment than the highest package. It will still provide value to the client but it will offer less than the highest package.
   3. Low – This package will be at the lowest investment and will provide the basics.