Many Factors Influence Your Small Business Pricing Strategy
When you first start a small business in Massachusetts, whether you base yourself in Boston, or any other town, financial decisions can be tricky, especially if you have limited capital. How do you prioritize competing costs like rent, wages and insurance? While you may be inclined to pour every spare dollar into developing your business, it’s important to invest in business insurance coverage so that your capital is protected from unexpected, uncontrollable events that could impact upon the future of your enterprise.
Having basic business insurance coverage can protect your premises, vehicles and other equipment from loss or damage, and you can also purchase specialized coverage, depending on the type of business you operate.
For your enterprise to be sustainable, as well as protecting it financially with insurance, you must charge prices that cover the cost of sales or service provision, and allow you to trade at a profit. Your pricing strategy is likely to be heavily influenced by local market conditions, and competition. You’ll want to look closely at the pricing structures of your competitors and take account of any points of difference between what you offer and your competitors offer. It’s vital to keep an eye on market prices on an ongoing basis, because your entry into the market and your changing prices will likely influence your competitors’ pricing strategies. It’s worth talking to a marketing or accounting professional, if you’re unsure about the best pricing strategy to adopt.
Pricing is tricky: it’s both subtle and changeable. Just as you carry out regular reviews of business insurance coverage to ensure that you are fully protected, you need to continuously monitor your pricing strategy to ensure that your enterprise continues to be sustainable.