The figures you need to add up before deciding your profit margin to get a final price are:
Direct production costs of each unit (materials, working hours, etc.)
Indirect costs (office rent, electricity, internet, etc.)
Taxes.
In the markup you are charging for your creativity and your work, so don't underestimate your value by adding it up. The big secret here is to know how much the client is willing to pay for what you offer . If you can ask, don't hesitate to do so, it will help you more than any calculation. You should also analyze the prices of your competitors and the quality of the product they are selling.
What market are you in?
Before making a decision , you should also quickly study the pros and cons of the market you are in:
If it is an emerging sector:
It is easy to enter, there are still few competitors and customers are more accessible, although you must convince them with a new product.
There may be uncertainty about success, material and distribution prices may be high, and it may be difficult to secure stock.
If it is an emerging sector:
There are more competitors and less uncertainty.
There is greater demand and customers know what they want.
Finally, if you enter a mature sector:
You may be in a saturated market where margins telecommunications email list are tighter .
Competitors are looking for new ways to do business to achieve profitability and differentiation. This could be an opportunity for you.
Once you have analyzed what sector you are in, you will be able to better decide your price by evaluating these terms based on what you want to offer and to whom:
Do you want to compete with a cheap price?
Do you prefer to prioritize quality, even offering yourself as an elitist alternative?
What added value do you offer compared to your competitors?
The turnover of SMEs directly depends on their ability to sell at established prices and whether they can compete with the prices charged by their competitors. Therefore, setting a price for your product or service will be one of the most important decisions you will make in your business, and not only at the beginning but every time the market forces you to lower your prices or allows you to raise them.