For generations women's work hasn't been paid work. Women have worked in the home since the beginning of time: cleaning, cooking, sewing, washing, nursing, driving, and caring for men, children and pets. Outside the home women have volunteered for every type of community institution and organization and been primarily responsible for the fundraising necessary to keep these philanthropic ventures going. It is estimated that the monetary value of today's housewife's duties would range from $125,000 to as much as $145,000 per year. Of course, more and more of these duties are paid today whether or not a woman performs them.
However, for many women just starting out as entrepreneurs they find pricing their product and/or service as daunting. Moving from doing something for free into charging for it is often more difficult for women than it is for men.
But pricing is the most important element of your business plan. Think of your favorite brand -- any brand. Ask yourself if you would pay twice the price for it. Of course, you wouldn't. Now, ask yourself if you would pay half as much for it. Now you might say you would as it is already your brand. However, if it were new to the market and you had never tried it, at half price, it most likely would have seemed inferior to your tastes.
Several years ago I coached a businesswoman in fashion retail. She found that in her upscale boutique the less something was priced the more likely it would not be purchased. If she found a great buy on an item she still needed to inflate the price to get her customer to buy it. This allowed her to lower prices of other more expensive items so that her clientele could afford the very best at both ends.
If you are providing a service you already recognize that time is money and that as a sole proprietor you must compensate for your time. But have you thought about what you'll do if business gets so good that you will need to hire an assistant? Even a hourly employee must be factored into your initial price. Once business begins to grow you won't be able to go back to your customer and say that your price has to go up due to the fact you need to hire someone to book your schedule now.
So, how do you price your product or service adequately?
First, do a feasibility study/business plan for your business and determine what your costs will be, to not just start up the business but to run it when you really get going.
This process will give you a starting point for what you need to charge in order for the numbers to work. In other words, if your plan shows that you will need about $10,000 per month to run your business with everything you will need when customers are in the door you can do the math and come up with approximately $2400 per week to cover your costs. Depending on whether or not you have planned to pay yourself a salary in this number, you are ready to decide how to price your product and/or service all while making sure you add in a comfortable margin (profit). You now have a price that you can take to a focus group and survey for feasibility.
You MUST remember to value your time in this equation. The main purpose of this Blog is to tell you (most women) that you cannot undervalue yourself in the marketplace. Every entrepreneur starts out their business AS the business. But, successful entrepreneurs separate themselves from the business. The business must be successful without eventualy so that you will be able some time in the future to exit it and cash out.
As a woman in business you must know that with money comes power. In order for you to make money you must put value on yourself and what you do.
The goal of every businesswoman is to create a successful business and that means a profitable business and that starts with pricing. What you do with your time is important and valuable - remember that the economy of this country is dependent on the work you do.