Determining the price
Interview with George Engel, director of Vrijzathe Financial Services and business manager at MKB Doorstart.
Our guest in this podcast is George Engel, director at Vrijzathe Financial Services and business manager at MKB Doorstart. He explains why setting the price for a product or service is a challenge for many entrepreneurs. Often they think they have no influence on setting the price, while they can actually direct this. If you want to determine the price of your product or service, it is important to approach this from two sides. First, you look at how much you would pay for your product or service. Then you look at how much is paid for your product or service in your industry. This sector information can be found, for example, in overviews published by ING or Rabobank.
Emotion plays a major role in the purchasing process. When you start a company that only uses low prices, customers start to doubt the quality of your product or service. Be a reliable party. Compare your product or service with that of the competitor and set a price based on this.
When you have set the price and you notice that your return is under pressure, it is good to know what your unique selling points are. What distinguishes you from the competition. Think of a snack bar. One snack bar on the corner sells organic chips with snacks and on the other corner, the snack bar sells normal chips with normal snacks. In this way, the organic snack bar can distinguish itself from the ordinary snack bar and offer the products for a higher amount. People go to the organic snack bar because they want to eat organic. As an entrepreneur, know where your strength and added value lie.
For example, when you work in construction, you have a lot to do with before and after calculating the price. When you calculate the price, it is important to find out how many hours you think you will have to do, how many personnel you need and how much the material costs. Put the price of the costs on paper. This makes it clear to the entrepreneur and the client how much the project will cost. When the project is ready, you start calculating. Ask yourself how many hours you spent on the project, how many staff you needed and what other costs were involved. Compare this amount with the preliminary calculation.