How to Know Your Offer Is Priced Correctly
I’m piloting a course right now (Check it out: Board Engagement Accelerator!) and one of the first things I needed to consider while building it from scratch was pricing.
Fortunately, as a two-time business owner and having over 30 years of leadership experience, I’m no newbie to setting pricing. But I wasn’t born with this pricing knowledge —I’ve had a lot of learning (and not always the easy way).
Pricing can make or break your business. Set your prices too high, and customers walk away. Too low, and you're leaving money on the table — or worse, operating at a loss. So how do you know if you've got it right?
Start With Your Costs
Before you can price anything effectively, you need a clear picture of what it costs to deliver your product or service. Include everything: materials, labor, overhead, shipping, and any hidden expenses. Many business owners underestimate their true costs and wonder why they're not profitable.
Calculate Your Break-Even Point
Once you understand your costs, determine your break-even point — the minimum price you need to charge to cover expenses. This isn't your final price, but it's your baseline. Anything below this means you're losing money with every sale.
Research Your Market
Look at what others in your industry are charging. This doesn't mean copying competitors, but understanding the landscape helps you position yourself appropriately. Are you offering premium quality that justifies higher prices? Or are you competing on volume with lower margins?
Understand Industry Pricing Norms
Different industries have different expectations and standards. Take time to learn how pricing typically works in your sector. Some industries operate on thin margins with high volume, while others command premium prices for specialized expertise.
Adapt to Your Specific Market
Your local or target market matters. What works in one geographic area or demographic segment may not work in another. Consider your customers' purchasing power, expectations, and willingness to pay.
Monitor and Adjust
Pricing isn't a one-time decision. Review your pricing regularly — quarterly or at least annually. Track your profit margins, customer feedback, and sales volume. If you're consistently booked solid or selling out, you might be underpriced. If sales are sluggish despite strong demand for your category, reassess your positioning.
The right price balances profitability with market reality. It's not just about covering costs — it's about sustaining and growing your business.
For help with finding your perfect price, consider booking a Breakthrough Strategy Session and we can cover this and more about positioning your offering!
