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 administrator at MKB Doorstart. He explains why determining the price for a product or service is a challenge for many entrepreneurs. Often they think they have no influence on the setting of the price, while they can give direction to this. If you want to determine the price of your product or service, it is important to approach this from both sides. First, you look at how much you would pay for your product or service yourself. 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 issued 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 determined the price and 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 fries with snacks and on the other corner the snack bar sells normal fries with normal snacks. In this way, the organic snack bar can distinguish itself from the regular 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, knows where your strengths 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.