Your Startup Is Leaving Money On the Table
Use These 4 Rules to Maximize Profits
Have you ever asked your paying customers how much your product or service is worth?
I do this a lot, and it’s not as scary as it might seem. Often, the majority say the product is worth more than what they’re paying for it. And that’s a good problem to have, right?
Well, yes and no. On one hand, it proves my business offers a lot of value. But it also shows that I’m leaving money on the table. In some cases, lots of money.
Undervaluing a product or service is a common startup pricing mistake. Once I understood why I kept making that mistake, I was able to break the pattern and make a lot more money per sale.
So let’s talk about why we entrepreneurs constantly sell ourselves short, using four pricing rules I run all new startups through.
Rule #1: Don’t price based on your competition’s price
Establishing a price model and setting proper pricing is one of the most difficult parts of developing a new product. And when it comes to difficult business concepts, we entrepreneurs tend to learn a lot of those concepts by osmosis — we analyze how established companies do things, and then we copy those things.
