The pricing “sweet spot” is a marriage between what you have to offer (services and products) and what people are willing to pay for those offerings. Determining your pricing requires that you examine the following:
- cost of materials
- cost of labor
- your experience
- your education
- market factors (what are similar services priced at in your area?)
- the VALUE that you bring to client
- the intangible worth of your creativity (your talents!)
(Not sure what the “sweet spot” is for your business? Revisit this post on “the right price“.)
But, there’s a hidden piece of the equation that isn’t considered often enough in small businesses (AND especially in the wedding industry!) Does this price result in a profitable and sustainable business model? Does this price satisfy your financial goals? Are you making any money?
In other words… you can be doing EVERYTHING right in terms of pricing, but still come up short. You can sell your products and services for what you think is a fair price taking the factors you’ve considered (above) and still not earn a living off of this business. Talk about disappointing! This is where pricing isn’t solely a marketing decision but also a financial decision.
How will you price AND make money?
So, how do you figure this out? You test it. Take a look at your pricing and determine whether your price x units sold is sufficient to cover your overhead expenses and your income goals. (If you want help with this formula, we have an auto-calculating spreadsheet that helps you figure out how many events you need to plan to break-even and how many you should do to make your income goal. Check out the Sales Plan and the related post here.)