For any new business entrepreneurs pricing is perhaps one of the most mind scratching exercises when preparing business plan. It is always difficult to tag the price on the value that you provide your customers. I have not seen any absolute formula for calculating the real value price of your product or service considering the customer emotions.

Pricing any products or services is not a one-time excercise. Carefully analyzing the market dynamics, your costs, customer loyalty and emotions, purchasing level of consumers, market competition, your brand position in market, demands, your cash position and many other factors influence the price and you will have to revisit the price chart and revise many times. But you will have to consider if the price is appealing to the consumers or not. And also evaluate the profit margin for yourself.

It is always difficult to tag the price on the value that you provide your customers. I have not seen any absolute formula for calculating the real value price of your product or service considering the customer emotions.

You cannot survive if you charge less than the cost you spend to produce the product or deliver the service. By estimating the total cost of operation of your business, you find out the break-even point of your business. Based on that you can set the prices for your products and services. Consider all your costs, amount you want to save, salaries, promotion costs,
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