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June 17, 2004
The Challenge of Pricing
Setting prices can be a frightening step in a start-up business. Most entrepreneurs tend to set prices too low assuming that they have to price below the market to get business. If that is really true in your market, you are in a commodity market. Not a good place to be, anyway.
BusinessPundit offers a good perspective on pricing which you can check out here.
"It is difficult to know the "market price" when you are making a new market. Charge too little and you leave profit on the table. Charge too much and you may not have the cash flow to sustain yourself. This is why I am a big fan of "soft openings." I like a chance to feel things out with a small group of customers rather than explode with business from day one and not be ready to handle it. You only get one chance to make a first impression."
Rob also links to a great article at CFO.com about pricing strategies.
Posted June 17, 2004 07:16 AM
at Belmont University in Nashville, Tennessee. He consults with a variety of businesses on start-up and growth related issues, and with larger corporations on re-establishing entrepreneurial cultures within their organizations. Dr. Cornwall's current research interests include entrepreneurial finance and entrepreneurial ethics. He has authored or co-authored four books.
