The Business Plan Workbook, 11th Edition

ASSIGNMENT 8 Pricing

The most frequent mistake made when setting a selling price for the first time is to pitch it too low. This mistake can occur either through failing to understand all the costs associated with making and marketing your product, or through yielding to the temptation to undercut the competition at the outset. Both these errors usually lead to fatal results, so in preparing your business plan you should guard against them.

These are the important issues to consider when setting your selling price.

Costs

Make sure you have established all the costs you are likely to incur in making or marketing your product. Don’t just rely on a ‘guess’ or ‘common sense’ – get several firm quotations, preferably in writing, for every major ...