One of the greatest causes of small business failure is improperly pricing its products or services to achieve adequate profitability! Typically, most small businesses price their products too low, believing that a low price is the best way to achieve needed sales volume.
Pricing involves determining "what the traffic will bear," knowing how your competition prices their products, matching your pricing strategy to your business image, and making sure that your prices cover all direct costs AND all fixed and variable overhead costs.
To gain a better understanding of pricing for your business, you should seek a SCORE Management Counselor. In many cases, he has successfully dealt with these issues. Experience is a great teacher!
Also from time to time, our SCORE Chapter offers workshops that include helpful guidelines for effectively pricing products and services to achieve maximum profitability. Be sure to register!