Setting prices for your event services can be confusing and tricky. When you set it too high, customers will complain and you might even loose some but also if you set it too low you risk losing your profit, customers will automatically make assumptions about its quality. Below are 5 helpful strategies that can help you fix the right price.

#1. Expenses

Before fixing your price, it is important to know how much your direct cost is, that is costs such as insurance, advertising, rent, office expenses etc; indirect cost -, and finally your break-even point which is where your costs and your income are equal meaning, the point at which you are neither making a profit nor a loss. Once you’ve reached your break-even point, anything you sell above and beyond generates profits for you.

#2. Research competitors’ pricing

Take some time to find out how much your competitors are charging for their services, this would give you an idea about how to set your price. Some of your competitors would willingly tell you what their charges are but others might hesitate especially if they know you are their competition. So you can just call (as a client) and tell them you need to have an idea of the costs for the specific services you want to know. Remember to be specific about the pricing information you ask for, for example, are their prices set at hourly rate or a per-job rate so you may get more accurate pricing.

#3. Ask your prospective customers

Do a survey and find out from potential customers how much they will be will to pay for that particular product or service. This information will give you a good starting point for our first round of pricing. Be aware that your prospects will always underestimate the price they will actually pay, so consider the prices they offer to be the very, very low end of what people in the industry should charge.

#4. Start higher

When it comes to pricing, it’s always better to higher then go down. One major pricing mistake people tend to make is to start with low penetrative prices to attract customers and then want to go higher. However most customers tend to respond negatively with price increases for most goods, unless the price increase reflects something new that is added to the product or service or it is a good with what is called “low price elasticity” these are goods whose demand is least affected by price increases, these tend to be goods with addictive qualities such as alcohol.

#5. Understand the economy

As an entrepreneur it’s important that you’re always aware of the current state of your industry, your economy. What was selling last year won’t necessarily be selling this year, and you need to understand the marketplace so can continue to make good business decisions.

As a business owner, your initial inclination may be to keep prices as low as possible so you can make larger quantity sales. But that often isn’t the most profitable choice. Profit is what keeps a business going, therefore every pricing decision you make should be a balance between giving you a good return but also giving customers value for their money.

Thanks for reading this article, we hope it helped