Pricing for Profit
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You've got a basic grasp on pricing and now you need to figure out how to price your offerings. You've downloaded the Excel workbook and you're ready to go!
STEP ONE: List out your current business expenses in the first section of the workbook.
STEP TWO: Determine whether you're pricing as a full time entrepreneur (your business is your only source of income) or a part time entrepreneur (you have other revenue streams and don't depend wholly on your business to pay your bills).
STEP THREE: If you're a full time entrepreneur, fill in all the monthly expenses that you face (both mandatory and flexible) in the second section of the workbook. If you're a part time entrepreneur, fill in all the monthly expenses that you want your business revenue to be able to cover (both mandatory and flexible) in the third section of the workbook.
STEP FOUR: Transfer your business expense and personal monthly expense total amounts to the top of the fourth section of the workbook. This will automatically calculate the minimum funds required to cover all your business and personal bills, as well as the additional 30% tax that you should be reserving for tax payment purposes*.
STEP FIVE: The workbook will also automatically calculate three tiers of pricing for you. You don't want your goal to be to break even each month and as such, it is our recommendation that you structure your business to earn more than just what is required for your expenses, but that decision is unique for each business owner. Feel free to adjust these prices up or down based on your specific needs, but they are good baselines to start with.
*We are not CPAs or tax preparers. Please consult with your tax advisor for specific tax details and questions.