Pricing Your Product or Service

9. Aim High

9.1 It is easier to reduce prices than raise them.

• If in doubt, try higher prices first.
• Be prepared to lower prices if the required sales volume is not achieved and your cashflow is under pressure.

9.2 Low prices often go hand-in-hand with poor quality and service. Is this the image you want to create?

• Some companies can win more customers (as well as boosting their margins) by putting their prices up.

9.3 For a start-up, competing on price is often a mistake. Low pricing is more often a strategy of big companies that cannot compete on service.

• What you will be able to offer is a string of benefits such as convenience, speedy delivery and specialist skills.
• Many small firms underprice in order to 'build up sales'. Aim to build up profits instead - the buying decision is rarely made purely on price.