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5 Step Venture eMentoring Program™

Session 4: Business Proposal

Module 4e: Pricing Strategy
How is the price that you will charge for your products or services competitive and will it make a fair profit for you?

There are two parts to this question. First, is your price competitive with other similar products or services available in your local market? You can determine this simply by researching competitor pricing. The second part of the question depends on your internal costs of producing the product or service, along with any overhead you may have. You examined these costs in Step 3. As you review your earlier calculations in this exercise, you can determine whether or not your business is going to pay you a fair profit in return for the risk, time and trouble you will invest. As you re-examine these costs, discuss them with your business counselor or mentor. Determine what makes sense. Write down your answers.

The following is a very interesting exercise. First, enter the net additional income you would like to (or need to) receive from the business operation on line I. If you've completed Step 3b: Revenue Expense Worksheet during this session, the following fields will be populated with your answers. If you've completed 3b at another time, you should have an email record of the results. Otherwise, please go to Step 3b: Revenue Expense Worksheet and complete the form.

Cost / Revenue Forecasting Model

Please see Step 3b for missing data.

I. Net Revenue Goal per Month $
II. Selling Price per Unit $0.00
III. Cost per Unit (Bill of Materials)  
Total Cost per Unit (Add Lines III a-g) $0.00
IV. Profit per Unit (Selling price/unit minus Total cost/unit) $0.00
V. Overhead  
Total Overhead $0.00
VI. Breakeven in Units (Divide Total Overhead by Line IV) 0.00 units
VII. Total Units Needed to Reach Income Goal  
a. Units / Income Goal (Divide Line I by IV) 0.00 units
b. Units for Breakeven (Line VI) 0.00 units
Total Units Needed (Add Income Goal and Units for Breakeven) 0.00 units
Can You Make and Sell This Amount Each Month???

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