You can have a Successful Business
....but you need to know what you're doing, prepare properly and make choices that are viable. A course like this is longer than some others; but it will put things into perspective and can make a lot of difference to your chances of success." Clients... that have completed courses with ACS that we have spoken to, have all been extremely happy. Leanne & myself are more than happy with the assistance we received and the prompt attention."
- Dynamic Workforce Solutions
Course Duration: 900 hours
Modules
Note that each module in the Qualification - Advanced Certificate In Applied Management (Small Business) is a short course in its own right, and may be studied separately.
How to Set a Price
What we sell our product or service for is definitely a major part of how successful a business is. If you do not sell your product for the right price, it can impact on your profit.
- Sell your product too cheaply and you may not make enough profit
- Sell it too cheaply and customers may think it is not good quality
- Sell a product at too expensive a price and it may not sell
Finding the optimum price for your product is essential. You need to determine whether the price is right, but how do you work out the right price for a product?
Selling a Service
If you are offering a service, then you can begin by looking at industry recommended standards for hourly rates. You might also find out the range of fees that others in your region are charging for the same, or a similar, service. If you, or your staff, are relatively inexperienced you may begin at the lower end of the price range and gradually increase fees as your business and experience grows.
Someone with specialist skills, or a great deal of experience, would be more likely to charge at the upper end of the range. The important factor here though is not to overcharge. Clients and customers will feel aggrieved if they think they are paying too much for your service, no matter how skilled or qualified you are. Once again, it is a question of striking a balance between what you could or should be charging and what people are happy to pay. Don’t sell yourself short, but don’t overcharge.
Selling a Product
If you are selling products then you have to sell them at a profit to keep your business afloat. If you can buy in bulk, then you can usually buy your products at a lower price and sell them at a lower price if you need to, or you want to make more sales. This is what the big supermarkets and department stores do. It is also why they can put on sales where prices are slashed by up to 70-80%.
When deciding on what to charge for your products, you have to think about:
- What price people are willing to pay
- The profit margin needed to cover your overheads and leave some left over
If you are selling a unique product then you can charge more for it since you have little direct competition. Nevertheless, even if you are selling something unique you need to be careful about not setting your prices too high. If you do, people will source an alternative or simply not buy your product. You also run the risk that others who have observed your high prices will then copy your product and undercut your prices.
If you are the only outlet for a particular product in a particular area then you may be able to set higher charges for the product e.g. a petrol service station in a remote region or the only grocery store in a holiday resort.
Setting the Price
If you sell a wide range of products a simple method of setting the price is to apply the same mar-up to each product. Let’s say product X costs you $10.00. If you were to mark-up all your products by 50% you would sell product X for $10.00 + 50% = $15.00.
This method might be useful if other methods are too complicated but it tells you little about the rest of your business and how well you are doing overall.
Other methods give you more understanding and greater control over price setting. The most crucial thing to know is how much your product costs overall. This will help you to determine how much mark-up to add to your price (and how many you need to sell) in order to make a profit.
The cost of a product is not simply what it costs your business to buy it in the first place. It also includes your fixed costs.
