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Name Your Price

How to set the right price for your product or service
July 1, 2000
URL: http://www.entrepreneur.com/article/29222

Face it. As an entrepreneur, you have to put a price on your services, products and time. If you're reaching for a feel-good figure in the dark without doing your homework, chances are, you're lowballing yourself-cheating yourself out of profits that could easily be yours. If you come in too high, you may be pricing yourself out of the market. Smart pricing is the key to business success, but how to find out what's right? Read on to learn how to set a price in today's market.

Who better to ask for the prevailing rates than your more-established competitors? Masquerade as a potential customer, or play it straight with the competition and tell them you're trying to get a handle on pricing. Our advice: always try honesty first. Competitors don't want rogue pricing to upset the marketplace and often will gladly share their rates.

Your competitors are no help? Don't despair, because the Web is crammed with info that will jumpstart your brain (and just may turbo-charge your calculator as you watch your income go into overdrive). Find inspirational and informative tips here:

Brain Food

The Contract And Fee-Setting Guide For Consultants and Professionals (John Wiley & Sons, $108, www.wiley.com) by Howard L. Shenson. This book is pricey, but you'll likely more than make back the investment on the next contract you ink because Shenson offers all the nuts-and-bolts advice needed to set smart rates.

Do you sometimes price yourself too low just because you lack the confidence to ask for the bigger numbers? Does your mouth freeze when it comes time to say that high number? Jack Canfield-an educator turned major entrepreneurial success through his Chicken Soup series of books-knows all about that, and in his six-tape set Self-Esteem and Peak Performance, he shares the secrets that have let him become a millionaire many times over. Get Canfield's prescription at www.chickensoup.com/jack/product1.htm#anchor1253870.


Before learning how the Net helps entrepreneurs set prices, Robert McGarvey and Babs S. Harrison say they used tarot cards.