Category Archives: Small Business Pricing

Small business pricing strategies

Using Microeconomics to Maximize Revenue

As a small business, you have to consider the concept of microeconomics when pricing your product or service to maximize revenue. By definition, microeconomics studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources (i.e., money). Contrast microeconomics with macroeconomics. Macroeconomics considers the the sum of all economic activity such as dealing with the [...]

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Availability of Financing

Do you offer your customers a convenient way to purchase from you? Is it possible to have them pay in little chunks rather than one big chunk? For example, 12 easy payments of $12 each ($144) sound a whole lot more affordable than one large payment of $130. This perception remains even though it is more cost effective to pay [...]

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Free as a Business Model

When you have a free product or service with high amounts of traffic, platform advertisers become interested in subsidizing your free product or service by paying you a fee to share their advertisements. Free products generate high platform traffic and increase the attractiveness of your platform to advertisers. Freemium users get basic functionality for free. However, a few paying people who [...]

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How to Price Your Hobby and Craft Projects

Turning a hobby or a craft into a business often has a fatal flaw with scalability. Say you have a business that produces 100 units that you plan sell for $25 and it costs you $20 to produce it. As a small scale business, you are happy with a $5 profit on each piece since you produce, pack, and ship [...]

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The Drug Dealer’s Mindset

As a business coach, one of the single most common issues I see with new entrepreneurs is their lack of understanding of gross profit, gross margin, and the impact of operating expenses. Their focus is almost always exclusively on the revenue gained from sales. I often refer to this as the “drug dealer's mindset.” Petty street-level drug dealers are often [...]

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Revenue Streams

When it comes to revenue streams as part of the overall Business Model Canvas, there are many factors that affect the sources of revenue. First, we must consider the fixed or list price of your product or service. However, when it comes to defining pricing, do you offer discount pricing if they buy in bulk or is [...]

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Capturing Value in Nontraditional Ways

When I grew up in Massachusetts, I remember reading a story about Joe Kennedy. He would go up to owners of older drafty apartments in downtown Boston and make them a unique proposition. Many of the units were poorly insulated and cost a small fortune to heat in the winter. Joe would agree to insulate the building at no cost [...]

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Keurig’s New Business and Economic Model

Fifty percent of Americans over 18 years of age drink coffee every day. That translates into 150 million daily coffee drinkers that consume 400 million cups per day. Not long ago, brewing a cup of coffee at home or at the office involved purchasing a coffee pot from one company and ground coffee from another company. Then, you had to [...]

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