Whether you are a product or serviced based, when you first start your business, getting your pricing right is something that you spend time on. You want to ensure that the "price is right" so that you are making money (the whole point of being in business is to generate income, profits and make money after all). But how often do you review your prices and check that they are right?
If you are a product based business, then the materials you buy or the products you buy in to sell will change in price as supplier costs increase. This means that you need to be checking your pricing on a regular basis too to ensure that your margins aren't being eroded. You can always make an informed decision not to change your pricing, but it needs to be an informed decision rather than something that happens to you and your business.
Whether you are product based business or service based business then increases in your fixed costs need to be factored into your pricing as you need to ensure you are generating sufficient profits to cover these and pay yourself too (plus cover taxes, building cash in the business for growth etc). Often, these increases are the ones that are forgotten about but can be the bigger amounts i.e. insurance, software, mobile contracts etc.
So how often should you review your pricing? If you are a serviced based business then annual reviews are sensible and if you are a product based business, then your best sellers ought to be reviewed on a quarterly basis and the rest at least once a year too, or if stock is seasonal then at the start of each season.
Pricing is crucial to business success and should be reviewed regularly. For a comprehensive pricing review, contact us or schedule your free booking today.
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