The long-term sustainability of any business largely depends on the profitability. Identifying your target customer demographic is an important first step in developing a pricing model. Investigate what your competitors are charging for a similar product. While it is important to offer competitive pricing, you don't want to price your products too low just because your competitors are doing it. Yours may be a value proposition, not a price proposition.

Successful entrepreneurs are in business to make money. It doesn't matter if you are handily outselling your highest competitor if your balance sheets and income statements are deep in the red. Every industry is different. Carefully evaluate how much your product/service is worth.

Published on: Feb 6, 2017