Disciplined Entrepreneurship: 24 Steps to a Successful Startup

STEP 16

Set Your Pricing Framework

IN THIS STEP, YOU WILL:

• Use your Quantified Value Proposition and Business Model to determine an appropriate first-pass framework for pricing your product.

Now that you have settled on a business model, it is time to start coming up with a pricing strategy. Fine-tuning the strategy can have a huge impact on your earnings.

With a business model in hand, you can now make a good first estimate on your Pricing Framework, understanding that it will likely change as you continue through the 24 Steps. This step is the beginning of a pricing process, because you will likely end up with multiple price points and pricing strategies, and you will iterate as you experiment and get feedback from the market about price points. Whereas your Business Model is much less likely to change, price points are often subject to change based on market conditions. Some businesses even change pricing on a daily basis (e.g., gas stations) or, even more dramatically, on a real-time ...