How to Set Your PRICE: 5 Step Framework

As a finance professional, I’m known for repeating the equation, “Revenue = price x volume”. This is critical for a business owner to understand, as your income and growth are a function of setting the right prices for your products and services and maximizing your client volume, which I commonly refer to as capacity. 

Strategic pricing is one of the core areas I focus on with my clients, as this allows them to earn more money and reinvest in their business. Whether you’re just starting out or you’re ready to re-evaluate your pricing, here is my 5-step PRICE framework to help you navigate the pricing aspect:

1. Payment structure 
   By offering pricing tiers or packages, you can cater to different clients’ needs and budgets. This allows you to be more accessible and provide options for those with varying levels of commitment or desired services. Prepaid packages or monthly membership options benefit cash flow and predictability of business performance, while pay-as-you-schedule options accommodate different financial situations and preferences.

2. Research market rates:
   Research what other businesses in your area, both industry and geography, are charging for similar services and products. This will give you a benchmark to work from and help you remain competitive.

3. Identify discounts and special offers:
   I recommend using discounts and special offers strategically to attract new clients, encourage repeat business, or fill up slower time slots. However, I caution you to do a gut check not to devalue your services and brand by discounting too frequently or deeply. 

4. Cost analysis:
   As you’re evaluating your pricing, I recommend reviewing all of your costs, including salaries, marketing, rent, etc. to ensure that your pricing covers your expenses and allows for profit. Note, your cost structure may change over time. 

5. Evaluate performance 
   Track client billing over time and analyze which services are most popular, which pricing methods are most effective, and any patterns or trends that emerge. Use this information to make informed decisions about adjusting your pricing strategy as needed.

I find many women, especially in the health and wellness space, struggle with setting their rates. If that’s you, I urge you to consider the value you’re providing your clients – am I solving their problem(s) and/or helping  them achieve their desired result(s)? If the answer is yes, then feel empowered to charge what your services and products are worth. You may also benefit from hiring a financial professional to help you evaluate this framework and your cost structure to ensure you maximize your pricing and profit.