Small Business Talk

The Podcast to Grow your Business Faster

How to Set Prices to Allow Yourself and Your Company to Thrive with Anna Kupisz

Show Notes

Background

Anna Kupisz is a very passionate and successful businesswoman and international best-selling author who has dedicated over 10 years to building her own companies. She is the CEO of three companies including Softway LTD and Foundation with Initiative.

A financial strategist and mentor with a background in economics and psychology, she draws from a wealth of experience to guide other businesswomen from making a decent turnover and low profit to a high turnover and HIGH PROFIT. Her philosophy is that your business must allow you to thrive, not just survive.

“7 biggest sins in setting the prices of your products and services that steal your money and profit leaving you frustrated, broke, and burned out”

Check if you make them and learn how to fix them! Take the quiz here.

Calculate all The Costs in Your Business

A huge problem is that we really do not calculate all the cost that we have in a business. We want to sell more hence are focused on selling. If you don’t have a margin on your product or service, or you think that you have margin, but it is eaten by different costs, then you generate loss with each product or each service you sell. It’s important we know the right definition of the price and that the price consists of two elements. The first one is the unit cost of each of our products and services. The second is margin. We need to calculate both and we need to calculate both separately.

Changing The Way You Think About The Price

Price consists of two elements. Start calculating both and when you calculate the unit cost then consider the production costs, transportation costs. The unit costs also need to cover a certain percentage of your fixed costs, certain percentage of your investment costs, and a certain percentage of your own salary. We’re so used to thinking that we will pay ourselves out of the profit, but there’s no profit, and then we struggle financially again.

Consider Your Margins and Who They Target

As small businesses we need to have great margins. Corporate or big companies don’t always target wealthy people; most of them target middle class or even people with lower budgets. However, we should target wealthier people and we can have a higher margin. People fear doing this as their competitors have lower prices and they feel their clients will go to their competitors. However, this is not necessarily the case.

Value is Often The Game Changer for our Clients

Many of us are tired of receiving low quality products and low quality service. We often choose to work one-on-one with somebody instead of buying an online course. Why? As we know that when we buy an online course, most of us will never finish it. Clients want results and a quality experience. Business owners or entrepreneurs that are new into the market, can be afraid of calculating the price so the price really reflects the value that they offer. We think that if we cannot afford such a service, then nobody will buy it, or if we cannot afford such a product, then nobody will buy it.