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Name Your Price

Stumped about what to charge? Setting prices is both an art and a science--and a little bit of guesswork. Here's how to figure it out.

By Geoff Williams

Opinions expressed by Entrepreneur contributors are their own.

Jeannette Doellgast spends a lot of time thinking about numbers. She has been doing so for more than a year, ever since she and her husband and business partner, Mohsen Alam El Din, bought the Plumbush Inn in breathtakingly scenic Cold Spring, New York. For Alam El Din, 50, born in Egypt and entrenched for 20 years in the restaurant industry, running his own company is his American Dream. Doellgast, 44, gamely switched careers to join him-after about 15 years as an executive in the textiles industry, and a three-year stint as an elementary school teacher. With the bed-and-breakfast, she soon found herself immersed in the art and science of setting prices.

First, Doellgast concluded that they would have to raise all the prices for both the rooms and food at the Plumbush Inn, which had been in existence for 30 years when the couple bought it. Long-time customers weren't pleased, and they made sure to let Doellgast and Alam El Din know it. "It was a risk," admits Doellgast.

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