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Top 7 Pricing Mistakes Entrepreneurs Should Avoid When Planning Their Online Business

By: Charu Jain | Date : 01 Apr 2020 | Category : Business

Date : 2 years ago

While establishing a worldwide business presence is an all-time dream of every aspiring Entrepreneur, we often find the majority of beginners failing miserably during their tenure. Though there are ample reasons behind the failure of the business models, we find planning competitive pricing as the sole reason in the majority of the cases.

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According to CB insights, 18% of the small business fail on account of incompetent pricing. With 90% of the start-ups failing eventually, it becomes extremely difficult to build an effective pricing module. As a sole entrepreneur, it becomes extremely hard for anyone to effectively price their products or services, and this turn one of the biggest reasons for their pitfalls.

Here we list out some of the biggest mistakes the creative entrepreneurs should avoid, thereby building a scalable business.

1. Not Setting Competitive Prices:

A lot of other times we find professionals charging incompetently for their products and services. Though at the start of your career, it makes relevance to build a potential audience for your business but setting prices without inculcating overhead expenses will end up making huge losses for your business. As a beginner, whether you are heading towards making your presence in either Fashion, Interior, Graphic, Beauty, Photography, Content creation or any other renowned business, always take care to include every cost incurred in setting your private business.

Whether it is about your makeup kit or your photography gear or let’s say your cost in purchasing software, fabrics, material, or brushes everything needs to be calculated while setting a price for your products or services. It is very important to decide the price strategy keeping in mind the scalability of the business in the near future. We recommend Entrepreneurs to first consider all incurred costs, then set a profit margin that let you scale and compete against your competitors in the industry.

2. Charging Clients on Hourly Basis:

So, this can be the biggest mistake especially when you are just looking to start your business. A lot of other times we see businesses and freelance candidates charging customers keeping in mind a set target income for the day. While this sound as an effective method in meeting targets over the month, but the majority of times candidates end up offering creativity and hard-work for just a few bucks.

Businesses should evaluate their charges bases on the level of efforts utilized in delivering client expectations. Also, while charging on an hourly basis demands to have suitable experience in the industry, Entrepreneurs end up consuming more hours in completing a job. This makes an unpleasant experience for the customer, thereby making you adjust your charges in order to maintain fruitful relations with the customers.

3. Charging Every Customer Same:

For every beginner, scalability should be the key important factor. While operating your business, always keep in mind to scale steadily with time. We often find beginners charging customers the same in every tier-group. This removes you any chance to scale your business to the next level. Entrepreneurs should always keep in mind to significantly draw major differences in their designing, drafting, and quality of services rendered to customers in different tier groups.

This helps you create a significant quality difference in your services, thereby charging customers differently as per your efforts and time. This even increases your chance to scale among top professionals and performing businesses in the country. Whether you are into manufacturing, designing, or rendering services, as an entrepreneur you should always keep presenting your skills before more potential audiences.

4. Misunderstanding Client requirement:

Often freelance and business professionals say yes for a client project without understanding his detailed requirements. This can land you incur potential losses for your business. On the other hand, you can fall into lawsuits on account of any customer grievance. As a creative entrepreneur, you should always give proper time in understanding your client requirements and accordingly draft a project layout for your business.

After making a project layout, calculate all cost which will be incurred in delivering the final project. All material, manufacturing, office, traveling, software, time, and effort cost should be calculated before quoting the final price. Always take care to charge your customers in milestones as this will create confidence within your customers and any extra requirement can be compensated in exchange for extra costs.

5. Doing Urgent Work for Free:

This is for those business and freelance professionals that undervalue their skills and expertise and deliver any urgent work at the same cost. Always value your efforts and hard work you deployed over the years in setting your freelance business. As a business identity, it makes relevance to charge customers for your time and any extra efforts.

Offering your services for some extra cost will not only superimpose your professional image in front of your customers but shows your professional attitude and gestures. This will exhibit your academic and designing excellence before customers which will then help you rise among your competitors sooner.

6. Lacking Confidence:

Many times freelance professionals and businesses can be seen losing confidence when it comes to increasing your charges in the industry. Never hesitate in raising your prices for your quality services and academic excellence you gain during your tenure. Your quality services are a result of your continuous efforts and dedication in enhancing your career and with the passage of time, you have the right to increase your charges in the industry.

Also, by raising your pricing you are increasing your average standard in the industry, thereby scaling your brand among more potential audiences. As an entrepreneur, your prime goal is to scale your business to higher levels, which then will be only possible by earning more revenues for your business. As a sole entrepreneur craving profits over the course of time should be your all-time goal.

7. Adjusting Price to Make Client Happy:

For a business to make the desired profits in the industry is important to have recurring customers for its scalability. But adjusting your prices thereby reducing your chances to scale among competitors will cost you potential losses for your firm. Do monitor your business rivals in the industry, but never deal with your charges in acquiring those one-time customers that are only there because you are ready to compensate your pricing for their presence.

However, for potential clients that can turn big profits for your firm, adjusting your prices a little, in order to acquire those customers, make relevance. But here to, take care to optimize your cost with a promise of getting recurring business for your firm. If possible, have the necessary tie-ups after the delivery of your project. Do take care to offer exceptional services to those customers that can turn profitable for your firm and can earn your good referrals and recommendation in the industry.

So, these were some crazy mistakes business professionals and creative entrepreneurs keep on committing during their course of business. Try to avoid these mistakes as much as you can and make your business a big hit this year. I hope you love reading this article, share your important feedback if any, in the comment section below. I will be happy to hear from you!

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