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What's in a price tag

posted 19 Dec 2014, 17:45 by Gordon Kay   [ updated 26 Jan 2015, 23:25 ]
With christmas on our door step, the most popular question I have received over the past few months is about pricing goods.  I hear so many business people tell me that you need to markup goods by 100%, 150%, 200% etc to cover cost.  And the same applies with hourly rate services.  

"Hmmm, how did you come up with that figure?"
"Thats what we did at my last place of employment!" or "A friend told me that's what they do!"

Can I give you one bit of pre Christmas advice? 

Don't believe what others tell you! 

It's not like they are lying to you, it's that everyone's business is different and so are their cost.

When we talk about cost, it not just the purchase cost of your goods or rates you pay your staff, it's the hidden cost as well.  

If you can tell the difference between a Direct Cost (Cost of Goods) from an Expense (Overheads) you are only a minute away from determining your profitable price tag.

I have even created a spreadsheet to do the calculations for you.  Just download into your Google Drive or as an Excel Spreadsheet.