Step 10: Set Your Price

Lets Go Party

Marian Fletcher

By the time Marian Fletcher, 55, decided to launch her own Baltimore-based party-planning and catering service, she already had more than a decade's worth of related experience working in her community. Despite her familiarity with pricing for such services, Fletcher nevertheless did a good deal of additional research before finalizing her fee list.

"I had been doing some party planning for a local restaurant owner for nearly 10 years and I loved it, but his restaurant ultimately closed," Fletcher explains. "Having worked there, I already knew the people in the community and had a sense of how much they'd be willing to pay. Still, I wanted to make sure that I didn't overprice my offerings once in business on my own, and I didn't want to underprice them, either, which might make potential customers question my top-quality reputation."

To learn what similar providers in the same city were charging for their offerings, Fletcher obtained some contracts from customers who'd hired other party-planning and catering services. She also directly contacted numerous restaurants and catering companies to find answers to her pricing questions. Since many of the people she approached seemed reluctant to help out a new entrant, Fletcher decided to go "undercover."

"Since very few people wanted to share pricing information with me when they viewed me as the new competitor on the block, I pretended to be a customer to obtain the information I wanted," Fletcher says. "I acted like I wanted them to do a job for me and was able to obtain a wide range of information. They provided me with fee lists, menus, and a variety of promotional literature. I now have a whole box full of items that I consult whenever I need to set a price for a new party package or catering option."

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This article was originally published in the March 1997 print edition of Entrepreneur with the headline: Step 10: Set Your Price.

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