How to Tell if Your Prices Are Too Low

One of the signs that you are pricing your products or services too low is that you’re always feeling strapped for cash. Plus, if your gut has been telling you it’s time to raise your prices, it probably is. You need to raise your prices if:

• You have plenty of customers but are barely making a profit.

• The vendors that supply you with materials have raised their prices and it’s impacting your profit margin.

• You feel like your business cannot grow.

Since you are considering reviewing your pricing strategy, here's what you can do next:

Step 1: Track your production costs and revenue

A fellow entrepreneur recently shared that she didn’t know how wasteful she was with her money until she started tracking it. It’s the little things like airtime, fuel, and card-swiping costs that are often forgotten. By tracking your expenses, you’re able to see how much you should be budgeting for. Accounting software can track your expenses (and calculate tax) automatically. You can pay as little as R150 per month for accounting software. Compare the top 5 Accounting Software HERE.

Step 2: Download our free template on how to calculate how much to charge for your services. It’s available here.

Step 3: Check out this pricing guide for tips and advice on pricing your products and services.

Also in this week’s newsletter:- Get an affordable marketing consultant with Startwise- More info on Managing Your Finances Including Pricing Strategies- Boost your business with an R5000 Ad spend voucher- Free Download: Small Business Bounce Back Guide

Have a great, productive week ahead!

Does your SME need an affordable marketing consultant?

The impact of COVID-19 has triggered a need for SMEs to increase their digital marketing efforts. With consumers spending up to 55% less (Ipsos) and ordering online, the key to expansion could be in your marketing strategy. If you aren’t quite sure whether to reach out to a Startwise expert for some direction and support, here are some of the marketing basics you should look at to get your start-up off the ground. It’s not as expensive as you think. Chat with an expert in our Marketing & Sales category for just 15 minutes for as little as R100.

Great Blog Posts to Help You Manage Your Finances Including Pricing Strategies

Free Template: How to create a cash flow forecast- A cash flow forecast shows your projected cash based on income and expenses and is an important tool when it comes to making decisions about activities such as funding, capital expenditure and investments. 6 Pricing strategies all SME owners should know- Learn about what it means to manage the pricing cycle, how to make subscription models work for you, and more. Why you should consider the value pricing model- Get the step-by-step guide on how small business owners can implement value pricing, which means fees are based on value to the client instead of the number of hours worked. Top accounting software for small businesses- Learn about how Accounting Software can eliminate repetitive tasks like data entry (record transactions and store receipts) and the calculating of tax, revenue and cash flow forecasts, among others.

ALSO READ: Product Packaging and Labelling Regulations

What help do entrepreneurs need the most on their path to recovery? We got you covered.

Get advice and tools to help you with the following:

• Get paid on time

• Find out where to get funding for your business

• Stand out to investors

• Get ideas to market your business online

• Run a well-organised business

• AND MORE in the Small Business Bounce Back Guide, in collaboration with Sage.

It’s free to download.