The pricing model is an issue that many entrepreneurs face, in the biggest question –
How much money do we need to charge the customer to cover our costs and maintain high profitability?
The pricing model is actually a formula that contains the cost of the product/service + fixed and variable expenses divided by the number of your customers. This is actually the balance point where you neither profit nor lose for your service/product. As soon as we know what this break-even point is and what the exact number is, we will want to add our profit to the break-even point and only then set the price for the customer.
A lot of entrepreneurs do not accurately calculate the break-even point and then a situation arises where the price per customer does not reflect their real profit and they really see that they are not able to be profitable, and the question is asked – “Where does the money go? After all, I have many clients, but I can’t make a profit.’
Exactly for this there is an exact formula that determines the price for the customer that takes into account all of our expenses in the business and contains within it the desired profit that we would like to earn.
Think carefully and understand what your break-even point is in the business – the point where you cover all the costs of the business in the price for your customer.