Pricing Goals

Here are some tips to help establish your worth.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

The goal in pricing a service is to mark up the labor and materials costs sufficiently to cover overhead expenses and generate sufficient profit. First-time business owners often fail without realizing that they have priced their services too low.

If your competition is underbidding you, think carefully before lowering your price. Can you reduce your overhead? Are your cost estimates accurate? Don't forgo your budgeted profit just to get a contract. A business that does not earn an adequate profit is more vulnerable to total failure because it does not have the cushion that good profits provide for absorbing costly mistakes.

Excerpted from Starting a Home-based Business

More from Entrepreneur
Our Franchise Advisors will guide you through the entire franchising process, for FREE!
  1. Book a one-on-one session with a Franchise Advisor
  2. Take a survey about your needs & goals
  3. Find your ideal franchise
  4. Learn about that franchise
  5. Meet the franchisor
  6. Receive the best business resources
Discover the franchise that’s right for you by answering some quick questions about
  • Which industry you’re interested in
  • Why you want to buy a franchise
  • What your financial needs are
  • Where you’re located
  • And more
Try a risk-free trial of Entrepreneur’s BIZ PLANNING PLUS powered by LivePlan for 60 days:
  • Get step-by-step guidance for writing your plan
  • Gain inspiration from 500+ sample plans
  • Utilize business and legal templates
  • And much more

Latest on Entrepreneur