The Right Price

Overview: Too many new entrepreneurs harm their own prospects by under-pricing their goods and services. However, if those company owners just take the time to think, they can set their prices closer to fair market value. The article asserts that people have a natural tendency to undercharge when they are first starting out in business. However, they can set their prices closer to market value if they take the time to think. The truth is, most people tend to charge too little when they first go into business. It is not always clear, after all, what customers are willing to pay or how much they value what they are getting. So there is uncertainty, and there is fear. First-time entrepreneurs usually feel as though they need every customer that they can get just to survive. They are afraid that if they ask too much, they might lose a customer's business. Most businesses do not have the luxury of deciding on a price after they have already delivered the product or service in question, but the same logic applies when they're setting prices in advance. In a new industry, for example, it may take years before the market becomes educated about the product or service being provided. Competition is usually sparse, and customers do not really understand what they are buying. However, overcharging is not a danger for the vast majority of people starting out on their first venture.

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Format: HTML | Date: Apr 2001 | Pages: 1