How to Effectively Set Prices For Small Business Products and Services

As an entrepreneur, setting the right price for your product is a key skill to master. Some business owners think that setting a low price will help them to get the customers from their competitors. Even though this is true in some cases, this many leave some negative remarks if you do not understand the price to value match.When it comes to pricing, the customers make the decision based on the value given by their product or service. The reality is to build a sustainable and profitable long term business, you must provide more value that that price you set. This is a key in highly profitable and most successful businesses.If your customers fail to see the value in your product, the customers will think of it as a ‘cheap quality’ product. In such situations, they will go back to your competitor’s products even though they may be priced high.The value of a product does not necessarily come from the raw materials of a product. Think of a Ferrari or an Aston Martin. The value of those products is generated by the brand and exclusivity. You can increase the value of your product by increasing the quality of presentation, after sales service or just by improving your store ambiance.To set prices correctly, you need to survey your competition and the real value delivered by them. If you need to get their customers, the most effective method is not to set a low price, but charge the same price while delivering higher value to your customers.