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September 2013

“How Can I Price For Profits Without Losing Customers?”

Most all of us try to get the most value for the least cost when buying products or services. But what happens when you’re on the other side of the price tag, when you as the small business owner must set prices that are not only fair to your customers, but also to your bottom line?

Few people are better qualified to discuss this issue than Ann Logue, who spent 12 years as a financial market analyst before turning her talents to writing. Ann is the author of Emerging Markets for Dummies, Socially Responsible Investing for Dummies, Day Trading for Dummies, and Hedge Funds for Dummies. In addition, Ann has written about industries, executives, and current events for Barron’s, Entrepreneur, Newsweek Japan, and a wide range of trade and association publications

Ann also shares her expertise as a lecturer in finance at the University of Illinois at Chicago, teaching both undergraduate and MBA students about corporation finance and international financial markets.

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Q: Pricing is something that all small businesses wrestle with, particularly those just getting started. What are the fundamentals for determining the ideal price for a product or service?


The short answer is, as much as customers will pay. Easier said than done? Yes. The price has to be high enough to cover all of the variable costs and some of the fixed costs of production. It also has to be appropriate to the market. A low price might attract attention, or it might make customers think that the product or service is not good quality. This is as much art as it is economics.

There's more! Click now to read the full interview, and visit score.org to get free advice from a SCORE mentor near you.
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