How do I calculate my prices correctly as a startup founder?
April 27, 2022 | 40,00 EUR | answered by Martina Köhler
Dear tax advisor,
I am about to start my own business and I am facing the challenge of calculating my prices correctly. I have already developed my business idea and created a business plan, but I am unsure of how to set my prices. Currently, I am still in the planning phase and I want to ensure that I work economically successfully from the beginning.
My background: I plan to offer a service in the field of marketing, and in the competitive environment, I have identified a variety of providers with different pricing models and structures. I want to offer competitive prices that cover my costs and allow me to make a reasonable profit.
My current situation: I have already considered costs such as rent for office space, office supplies, personnel and marketing costs, as well as my own living expenses. However, I am having difficulty incorporating these costs into my pricing without becoming too expensive and scaring off potential customers.
My concerns: I am afraid that I may set my prices too low and therefore not cover my costs, or worst case, make losses. On the other hand, I do not want to set prices too high and scare off potential customers or make myself unattractive compared to the competition.
My question: What methods and calculation models do you recommend for me to calculate my prices correctly as a new business owner? How can I transparently consider my costs and offer competitive prices at the same time? Are there any special tips and tricks that can help me plan my pricing optimally and successfully implement it?
Thank you in advance for your professional support.
Sincerely,
Christine Walter
Dear Mrs. Walter,
Thank you for your inquiry regarding the calculation of your prices as a start-up entrepreneur in the field of marketing. I understand that setting prices is an important and challenging task to work economically successfully. I would like to offer you some recommendations and tips on how to properly calculate your prices.
First and foremost, it is important that you accurately capture and consider all of your costs. This includes not only obvious costs such as rent, office supplies, and personnel, but also hidden costs such as insurance, taxes, reserves for repairs or investments, and your own cost of living. Make a detailed list of all expenses associated with your business to get a comprehensive overview.
A proven calculation model is full cost accounting, where all costs, both fixed and variable, are factored into pricing. You must ensure that your prices cover all expenses and allow you to make a reasonable profit. Set a realistic goal for your profit and factor it into your prices.
To offer competitive prices, it is important to analyze the market and the prices of your competitors. Compare your services with other providers and set your prices accordingly. However, be aware that it is not always wise to orient yourself on the competition. Consider what unique selling points you have and what added value you can offer your customers to position your prices accordingly.
Another tip is to test different pricing models and make adjustments if necessary. For example, you can introduce price packages or discount promotions to attract customers. Stay flexible and adjust your prices regularly to be able to react to market changes.
In summary, I recommend that you analyze your costs in detail, apply full cost accounting, monitor the market, and be flexible in pricing. With careful planning and regular review of your prices, you will surely be able to work successfully as a start-up entrepreneur in the field of marketing.
I hope that my tips will help you in calculating your prices. If you have any further questions or need assistance, I am happy to help.
Best regards,
Martina Köhler, Tax Advisor
