Before You Start
The first price is usually a guess, and usually too low
New founders often price by copying a competitor, halving it, or choosing a number that feels comfortable to say. Founders a few years in are asked what that cost them. This session works through a first price from three directions, cost, customer and competition, and then practises saying it.
Explore this page6 sections
A price is a statement about your business, not only a number.
A low price can bring customers and still lose money. A high one can signal quality and still scare off the first buyers. A founder who has not worked out their costs often discovers, three months in, that the business is busy and unprofitable.
There is no single method, and no number that a session can supply for any trade. What there is, is a way to look at the question from three sides and decide with open eyes. Founders who have priced before describe how they did it and what they changed afterwards.
It does not offer tax or legal advice. Where GST, invoicing or contracts are involved, it names what to check with an accountant.
Three ways to look at a price, and then the decision
36 topics across 7 areas. Seven parts: cost, customer, competition, then choosing, saying and reviewing.
What It Costs YouThe floor under any price.6
- Materials, parts and anything bought for each sale
- Your own time, valued at something more than nothing
- Share of rent, tools, software and transport
- Fees, commissions and payment charges
- Returns, repairs, wastage and customers who do not pay
- Tax, where it is added or included
If you cannot cover these, no volume will rescue the business.
What It Is Worth to the CustomerThe ceiling above any price.5
- What the problem costs them if it is not solved
- What they pay now, in money, time or worry
- What they could do instead, including doing it themselves
- How much of the result depends on you
- Who in their business decides, and what they can approve alone
What Others ChargeUseful, but not the answer.5
- Asking for real quotes, as a customer, from several providers
- What is included and excluded in each
- Where you are better, the same or worse, and the evidence
- Whether the market has a normal range, and where you want to sit
- Not assuming that a competitor's price is profitable
Choosing a Price and a StructureThe number and the way it is charged.5
If you are registered for GST, say clearly whether quoted prices include or exclude it, and put it on the invoice. Ask an accountant how it affects your price.
- Per unit, per hour, per job, per month or a package
- A simple range of options, rather than a long menu
- An advance or a deposit, and the balance on delivery
- A discount for something you want, such as an early commitment
- Whether a first customer gets a different price, with a stated reason and a time limit
Saying It AloudMost pricing mistakes happen in conversation.5
- State the number, then stop talking
- Do not justify, apologise or discount before they have responded
- Explain what is included, in terms of what they get
- Say what the price depends on
- Practise it with someone until it is dull
When They Say It Is Too ExpensiveA statement that can mean several things.5
- Asking what they are comparing it with
- Offering a smaller scope at a lower price, not the same scope for less
- Checking whether the objection is price or trust
- Holding the price when you have a reason to
- Being willing to lose a sale that would lose money
Reviewing and Raising ItA first price is a starting point.5
- Tracking how many say yes at each price
- Checking actual cost and time after the first few jobs
- Raising prices for new customers first
- Giving existing customers notice and a reason
- A date, three or six months out, to review
Common pricing mistakes
- Leaving out your own time
- Copying a competitor's price
- Halving the price to win the first customer and being unable to raise it
- Discounting before being asked
- Quoting before understanding the job
- Never reviewing the price
What participants leave with
- A cost per unit or per job in their own numbers
- A short list of comparable quotes
- A first price and the reason for it
- A practised way to say it
- A review date
How the session runs
One or two founders describe how they set their first price, what happened and what they changed, including mistakes. A worksheet covers cost, customer and competition, and participants fill it in for their own business in a small group, then practise saying their price in pairs. Bring any quotes you have. Evening or weekend sessions, in person or online. Speakers describe their own experience, and no price or margin is presented as normal for any sector.
What your students leave with
- A full cost per unit or per job, including your own time
- A view of what the product or service is worth to the customer
- A range of what comparable offers charge, from real quotes
- A first price and a reason you can give for it
- A way to say it without apologising or offering a discount unprompted
- A plan for when and how to review it
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
Work out the floor, test the ceiling, and say the number without flinching.
Tell us who your students are and what stage they are at. Sessions are free for participants.