Name Your Price How to set the right price for your product or service

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

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

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

• "Pricing." With this page, you've struck themother lode-it offers links for info on "Basic Pricing,""Setting Fees," "Pricing Your Product" andmore. Go to sbinformation.about.com/smallbusiness/sbinformation/msub62.htmfor the lowdown.

• "How Do I Price My Services?" (www.eto.org.uk/faq/faqprice.htm).A dandy FAQ prepared for Europeans but relevant for anyonewrestling with pricing their services. Especially useful here arediscussions of differing theories of pricing("breakeven," "perceived value" and"competitive").

• "Pricing Your Product" (ext.msstate.edu/newsletters/hb-mbb/20000111.htm).On-the-money advice from Mississippi State University, whereyou're walked through a magic formula: direct costs + labor +overhead expenses + profit = price. Need elaboration? The profsprovide it in this succinct, understandable paper.

• "How To Raise Prices Without Losing Your Customers"(home3.americanexpress.com/smallbusiness/resources/managing/pricing).It can be hard and tricky-current customers won't clap theirhands in approval if you up the going rate-but this expertroundtable (assembled by American Express) offers shrewd tips fornudging your prices higher.

• How much do you want to earn over the next year? Know that, andthe "take-home pay calculator" at www.freeagent.com/eoffice/payrollcalculator.aspis a cool tool to evaluate your overall financial picture. Inputbillable hours, hourly rate, expenses and deductions and get adetailed analysis of your gross billings. The results can besobering, especially if you realize that at your current rates, youare mathematically eliminated from ever getting ahead. Thiscalculator can be just the shock-treatment needed to prod yourrates.

• Sell products? Or maybe you just want another take on thisdelicate arithmetic? Use the "Cash Flow BudgetWorksheet," a free download at www.news.onvia.com/x3754.xml.The template helps you see if your business will generate the cashnecessary for survival (yours and its). It's easy to use, andinside a few minutes of inputting numbers, you'll have theverdict before your eyes.

Brain Food

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

Do you sometimes price yourself too low just because you lackthe confidence to ask for the bigger numbers? Does your mouthfreeze when it comes time to say that high number? Jack Canfield-aneducator turned major entrepreneurial success through hisChicken Soup series of books-knows all about that, and inhis six-tape set Self-Esteem and Peak Performance, he sharesthe 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 tarotcards.