I work with all sorts of people and I have friends in innumerable fields. What I have noticed is they are all plagued by the same dilemma. Charging their worth for their services and products. Firstly, there are categories that these businesses fall into (In my humble opinion) IMHO.
1: nearly Impossible to find specialty items and services that one person or group has cornered the market on. Androsia, Cat island hand made fish pots, or tuning the organ in Christ Church Cathedra, heart surgery of course. These may be essential to your work or survival and so have a high premium.
2: Then you have ubiquitous products or easily performed services, than can technically be made or performed by anyone. People pay for these because they have more money than time or an over abundance of pride or self importance. These are often not very important.
3: a wide range falls in the middle, maybe you know where to find it when you need it and can do without it normally. Tire shops, general mechanics, yard cleaning.

This is where I see the problem.
Firstly, people seldom know or cannot articulate their true costs. How much did your equipment cost? How is it being worn by each product? How much is your building rent…by the square foot…per shelf?

Secondly, people do not know their market. Who is buying your product? Will they keep buying it…from you? Are you the only supplier? Is there anything special about your product?

Most importantly, people have unrealistic financial goals. If you charge more than people can afford, building your future on pay checks that may never arrive, the end game is high liabilities and accounts receivable that will never be collected…Duh. If you charge too little, hoping to serve the entire community, you will not survive as a provider.

Basically, make your books. Know the cost of your next project (cell phone time, fuel, computer time, new equipment purchases). Work a month. See how many hours you work and how much you make (time is the only true comparable measure), but factor in your other costs. Compare this to your financial goals. Are you really making enough to be successful and sustainable? If not, can you cut costs? Be more efficient? Are you just in a bad market?
Next month adjust your marketing to see if it is your market that needs tweaking. This is possibly the easiest. For example a photographer without a website and Facebook page is not going to survive these days imho. Go for it. Do well.

Sincerely,
Ancilleno Davis, AA. BSc. M.Sc.

Advertisements