It is now time to think about that very important skill set, mastering pricing for profit anda creating a profitable price list. This is a must for a profitable embroidery business. What is a profitable price list? A profitable price list is one that will bring in enough money to pay all of the bills, pay you a salary, and plan ahead for future growth. How do I master pricing for profit? Here are the basic steps.
Step 1. Go through the How to Price Embroidery videos. Watch each one and then go back and start the process.
Step 2. Figure your Breakeven Point-Use the Year-end Workbook to add all of your income and expenses to. Once you have all of your expenses in, you will then add these expenses to your Cost Analysis Spreadsheet inside of your Pricing Workbook. You will then know exactly how much money you need to be bringing in each hour, day, week, month and year! This is your breakeven point.
Step 3. Figure out how much each process is costing you. Each step inside of your business has a cost attached to it. Time out each process and you will know how many minutes or seconds each one is taking. You can then multiply those times by the cost per minute or second. This will be the total cost of each process.
Step 4. Plan for Growth in your business. You must add additional costs into your Cost Analysis Spreadsheet to accommodate your growth plan. You must have additional money added onto your equipment sheet to allow you to be able to add that into your pricing plan so that you have money set aside for new equipment when it is needed or any type of expansion.
Step 5. Add for Profit – On your List Prep Sheet, you will adds the amount of profit you want to mark up each one of your pricing scenarios.
Step 6. Create Your Price List – Your price list will be automatically created when you add the amount of profit you want for your markup, but make sure it is enough for each pricing scenario. If not, adjust it to work for your market. Print out each o
Do not skip this process and create your pricing by gathering other embroiderers price lists. This does not work and can cause your business to sink. I know this very well. Getting your pricing together really is not hard, but it does take a bit of time to developed this skill set and create a money-making embroidery price list.
You will find that you have a lot more confidence when you are working with your customers when you know exactly how much you should be charging them for each job. Your customer will have more confidence in you when you are firm with your pricing and can give them a quote quickly. This step alone will bring in more business.