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What are the Ten factors to consider when pricing your product or Service?

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تم إضافة السؤال من قبل Hisham Emad El-Din Nabawy , Senior account Executive , Infobip
تاريخ النشر: 2013/11/25
Hisham Emad El-Din Nabawy
من قبل Hisham Emad El-Din Nabawy , Senior account Executive , Infobip

There needs to be sound reasoning behind your pricing. This reasoning should be based on both internal and external factors. Internal considerations are factors driven by your business positioning and objectives. Many of these items you can control, including your expertise, people, scheduling, quality, and your cash flow. External factors are often things beyond your control. These are driven by the economy, the business climate and the clients. They could impact your pricing decisions too.

These factors include scope of work, the client, scheduling, collaborators and supply and demand. As a handy reference, I put a document in your resource file, called10 Factors to Consider When You're Pricing. I give you a series of questions that you can ask either yourself or the client to gain valuable information before pricing. However, let me briefly break these factors down now. You need to figure out if you have the right expertise for the project. Because if you don't, it can mean having to learn new skills and take more time to do the work, or possibly have to hire someone to help you.

People are a big consideration. This is especially true if you have a design firm. You must know if you need your senior or junior designer to do the work, because your actual labor costs will be different. When you're pricing scheduling can be key. It's about knowing how much time is required and whether or not you need to juggle multiple projects simultaneously. What are the client's expectation about quality? You need to factor in whether or not they can and will pay for that. Your own cash flow undoubtedly will be a factor in pricing. Design is a business and all businesses have financial requirements and obligations.

Now for the external factors, the scope of work is critical to know, but not always locked down at the start of a job you're pricing. It's also hard to gauge a new client. But who they are and how they work, both personally and as a company will matter a lot. Your collaborators can also affect design prices. Being forced by a client to work with a difficult supplier can be time consuming. Hiring somebody with special expertise can be expensive. Supply is a big factor too. Who are your competitors and are there a lot of them or not? The flip side of that factor is demand.

Are there a lot of clients who want to hire desigers like you or maybe not. All these things have cost implications. Think it through and consider these factors as you begin to price your services.

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