What Should Home Businesses Charge?
June 20, 2007 by Mary Emma Allen
The question of what to charge for our services and products often is a quandry for home business owners, whether they sell items they’ve made, resell those purchased wholesale, or perform a service. There are various formulas of cost of materials plus operating expenses plus an income, yet there is no absolutely fixed one. Much depends on supply and demand.
Yvonne at Grow Your Writing Business offers some insights in a post, Price vs Value – How Much Should Writers Charge? Although Yvonne provides the viewpoint of a writer addressing writers, you can apply much of what she discusses to most any home business.
When you can’t compete because of price, offer value that’s unrivaled. Develop a reputation for great service and quality products…and a pleasing manner with your customers/clients whether you operate a traditional business or one online.
How have you handled pricing in your business? Perhaps you’d like to share with us.
I think you’ve summed it up beautifully with “When you can’t compete because of price, offer value that’s unrivaled.”
Thanks for mentioning my post, Mary Emma.
Thanks, Yvonne, for visiting Home Biz Notes and taking time to leave your comments. You had some very good information in your post (mentioned above) which should help home business owners when considering their prices for products and/or services.
An important topic. I was thinking of quoting $2,000 for some particular work the other day, then rang a colleague in the city who does work for the same client and asked his advice. $3,000 “or they won’t take you seriously” he said. The fact that he has a city office to maintain and I operate from home is basically no business of the client’s, provided the service is up to scratch.
Thanks, Des, for sharing your experience. Yes, too often we price ourselves too low because we’re afraid we won’t get the job or sell the product. Yours was a good move…going to a friend who would have some idea what the client would expct…or have in mind as a price range.
Another good point, which I think home business owners often don’t consider. Just because your overhead might be lower (at quick glance) than someone who rents outside-the-home space, doesn’t mean you’re less talented nor capable in what you provide.