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More Money, Honey

It's time to raise your prices. Here's a step-by-step guide to doing it right.

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This story appears in the September 2000 issue of Entrepreneurs Start-Ups magazine.

Do you rely on low prices to lure customers? Are you undercutting the competition? Discounting your products or services? The strategy may be effective in launching a new business, but it could lead to problems once you're established. You can't afford to operate too long with prices that are unrealistically low. When it's time to raise prices, follow these steps:

1. Consider all your costs of doing business, including utilities, supplies, fringe benefits and your salary. How much would your time and knowledge command if you were working the same number of hours for someone else every week? (You may not be able to afford to hire yourself, but at least you'll have a target to shoot for.) Then include such items as insurance (business, health, auto), car expenses, telephone bills, taxes, equipment, repairs, travel and all other business-related overhead reflected in your meticulous records. (You do keep meticulous records, don't you?)

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