Setting the right price for a product or service is critical for a small business. But many entrepreneurs don't succeed the first time – or the second or third, in some cases.
The problem is that there is no one formula that yields the best price point, experts say.
On the most basic level, the price should cover the overhead of the business and provide some profit. That can be tricky to calculate, especially at start-ups, says Patricia Sigmon, author of "Six Steps to Creating Profit" and president of David Advisory Group in New York, a consulting firm for small and mid-sized businesses.
Typically, entrepreneurs come up with a price based simply on the cost to produce the product, she says. They often overlook a slew of behind-the-scenes operational expenses such as "licenses, taxes, workman's compensation or the telephone bill," she says
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Author: EMILY MALTBY
