Published on : 01 April 20203 min reading time
Correctly defining the price of a service is essential for the smooth running of all activities. Three essential points will be mentioned in the following article in order to set the price to be adapted for the cost of services and the distribution of profits. Without further ado, find out the essentials in this regard.
Calculation of costs and profits
As a first step, it is necessary to make an estimate of all the expenses for which the company is responsible. These include the cost of labour, travel expenses and the price of equipment. It is with this in mind that it is recommended to estimate a service, at the risk of running the risk of losing it. From the calculations of the charges, we have a better vision of the profit margin that will have to be imposed. In all cases, it is essential that the service rates are higher than the expenses generated by the activity. If this is not the case, the loss of money will be significant. One can initially make provisional tariffs and then adjust them according to the real value of the profits to be made.
Carrying out a market study
Subsequently, market research is an infallible technique to position oneself in the market. In fact, in this field, research is undertaken on the various rates offered by the competition. In this way, one has more idea of the prices that should be imposed. However, it is not necessary to propose the same tariffs without a brief cost calculation. It is also necessary to avoid lowering prices considerably, for fear of not being able to market. It should be noted in passing that quality work is the main reason for higher prices. One should not devalue oneself. To estimate a service is then an art and a calculation.
The questioning of customers
The simplest method of determining the price of its services is to ask consumers directly. This will give us a notion of purchasing power and allow us to make an estimate that is closer to reality. To do this, surveys will have to be undertaken: preferably asking open-ended questions to get more information. In this way, services can be improved and appropriate prices can be offered. It is also possible to indirectly ask how much a customer would be willing to spend on a particular service. It is no longer necessary to state that the customer is king and that his actions depend on the success of the company.
Controlling inventory management to optimize costs
Cash flow says a lot about your company