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When business owners make up selling prices, they trot out this silly phrase as their reasoning: I charge what the market will bear – the going rate. Sadly, virtually all business literature, and most accountants and bankers will back up the ‘going rate’ theory. You will be instructed to establish a selling price that is within a percentage point or two of what everyone else in the market is charging.
This is why I wrote How Much Should I Charge? When creating selling prices, base them on your real costs of doing business, including fair compensation for you and your hardworking employees…NOT ON WHAT THE MARKET WILL BEAR. Consider what the market will bear… $20,000 for a Rolex watch, $125 for a cigarette lighter, $4 for a six-pack of soda. The market is not strictly price driven…or even primarily price driven. This is what it takes to make money in your business:
 Why is this what the market will bear nonsense so ingrained? Ignorant men will defer to the opinion of experts. Some experts in accounting will tell you silly rules like:
That’s what you’ll learn in "How Much Should I Charge?" Pricing Basics for Making Money Doing What You Love. You can check it out at Books & More. Here's the link: http://www.heatinghelp.com/shopcart/product.cfm?category=2-33
 Dan Holohan  "Plumbers Protect The Health Of The World." 
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May I suggest that if most businesses fail - about 80% in the first three years - it is foolish to base your financial well being on what others are charging. What makes you think the fellow down the road has any idea what he is doing? Sure he is busy…busy isn’t so hard. Creating and sustaining profits and developing careers for you and your staff…ah, there’s the rub.| Dan Holohan - [Intro] | [Email] | [Website] |
| The views expressed in this article are those of the individual author and do not necessarily reflect the views of the management or staff of MasterPlumbers.com |
