Pricing is always viewed as that issue in small business that’s sensitive and difficult to identify. It makes people uneasy especially if they don’t value their work. In the past some pricing has been based on supply and demand. Some companies look at competitors prices and fix theirs based on that benchmark. Others look at their overheads and stick a margin on top to ensure profit.

Rarely do we consider our true value based on competency, ability, knowledge and craft. Invariably, we stick our finger in the air and decide the price based on which way the wind is blowing (perhaps a little unfair but very true.) What we need to do is understand the power of establishing price in the minds of our customers and acknowledging our value.

Setting price is obviously important especially when we acquire a new customer. Once we give a price, we have established that price in a customers mind which is then very difficult to change. That first figure shapes your present and future pricing structures. It shapes how much your customer thinks you are worth and what they are willing to pay.

It’s called an anchor and, as customers, we refer back to that first anchor whenever we buy more. That’s why it’s critical to save yourself a lot of hard work later on and identify your true value right from the beginning. You can’t set you day rate at £500, only to realise a few months later your actually worth is £700. It will take you ages to hike the price up to what you really feel it should be and, where you feel valued enough to motivate yourself towards the customers aspirations.

The first price you give to a new customer influences not just today but for the rest of your relationship with them. Really understand what the customer values and make sure you deliver those values in an unusual, different way. Then you can charge a valuable price for your product/services.