How to establish pricing for your first startup

You’ve decided to start your own business. You identify your product, create a fancy new website, and you’re chomping at the bit to reach out to potential customers or clients. But before you do, you have to decide how much you are going to charge for your services.

Pricing starts with self-confidence.

Winning new business requires being able to convince a potential customer 1) that you have the expertise or skill set to help them solve a problem or fulfill a need and 2) your price is worth what you bring to the table. Simple, right? Not if you’ve never had that discussion before. You don’t have a book of business to call on as a point of reference. You think you’ll do a great job, but you don’t know. And that’s when you can find yourself grappling with self-doubt—wondering if your rates are too high or if you even should be charging someone at all. If you have what it takes to do the job, be confident in yourself and your abilities.

Don’t forget to keep the lights on.

Once you have your self-confidence dialed in, the next factor to consider is how much you need to make to stay afloat. How much is your time really worth? And at that rate, what’s the minimum number of clients you’ll have to secure each and every day to be able to keep a roof over your head, eat, and make a living? This part of the pricing equation is critically important—if you’re running on thin margins, you’re going to need a lot of customers. If you’re running on high margins, you’re going to need a smaller group of customers who are willing to pay what you’re asking.

A little benchmarking never hurts.

When you’re starting a new business, it’s always hard to tell what the market will bear. You don’t want to overcharge for your products and services and price yourself out but you also don’t want to undercharge and leave money on the table. Big companies do this all of the time—that’s why you don’t see any national fast food chains with a $3.00 “value” menu. They all seem to hoover right around $1.00 (give or take a penny). So look around. Find a few potential competitors and try to find out what they’re charging for similar products or services.

Customers vote with their wallet (or debit card).

Every time you speaking with a potential customer about pricing, you’ll gain invaluable feedback. Listen to what they say—how they react when you mention a price. Do they wince? Does their jaw drop? Do they roll their eyes? If they do, you might be a tad high. And when that happens, you have to either decide to drop your prices, focus on a different customer segment, or do a better job of convincing them of the value of your product or service.

Calibrating pricing can take time.

Don’t expect to have everything completely hammered out from day one. If you put some thought into your pricing and benchmark against your key competitors, you should already be in the pricing ballpark. But you still might find you need to tweak the way you package and price your goods and services…and that’s okay. The more your business grows, the more data you’ll have on whether your pricing strategy is working or it isn’t.

So what do you think? Share your comments.

New FedEx Office more small business friendly

A few months ago, I ran into my local FedEx Kinko’s only to find myself in the middle of a major construction zone complete with guys on ladders, missing ceiling tile, and torn up carpet—a total mess and totally disruptive for business.

Smash cut to today. FedEx Kinko’s is now FedEx Office. Rebranding and remodeling are complete and, I have to say, I really like what they’ve done with the place and think the remodel makes the store much more small business friendly.

The first thing I noticed was new laminate flooring that helps to create a welcoming, clearly defined path straight from the front door to the service counter (think airport runway)—a great example of using flooring (and your floor plan) to influence customer flow.

Throughout the store, they also used paint schemes that not only add some punch to what had been overly drab “institutional beige” walls but also help small business customers quickly navigate the store based on their needs (shipping, signage, copying, etc.).

Along the perimeter near their large outside windows, they created individual work stations where you can either connect your laptop or rent time on one of theirs to print or scan documents—a nice touch and a useful work space for entrepreneurs on the go.

Beyond the major remodel, they’ve also added a few new features including a smartphone app that allows you to print to many FedEx Office locations—definitely something that could come in handy when you’re traveling.

If you’re a small business owner and you’re not at the point where you can justify buying a fancy “all in one” laser printer, or you’re an entrepreneur looking for a little space to set up camp in a pinch, you might want to check out your local FedEx Office.

How to handle unsolicited feedback about your business plan

I was meeting with someone and thought it would be helpful to share a quick overview of what I was working on—a new business plan that included an overhaul of my website and a completely new menu of services.

And that’s when it happened. We moved from what was intended to be a little background information to 15 minutes of “If I were you’s.”  As he continued to share his thoughts, I couldn’t help but wonder how we got there. But I couldn’t recall one “So, what do you think?” or “Does this make sense?” or “Will this work?” I usually love feedback. But there are times when, whether writing a business plan or revamping your website, you’ve moved past the point of gathering any more input. And this was one of those times.

After a quick assessment, I figured I had three primary options:

1. Try to refocus the conversation. Thank him for his suggestions and then do my best to eliminate openings for unsolicited feedback (in other words, no “So what do you think?”).
2. Ride it out. Play the odds that he can’t go on for more than 5 or 10 minutes before talking himself out.
3. A combination of 1 and 2. And ultimately the strategy I decided to run with.

As an entrepreneur, you’ll get loads of unsolicited feedback—but it doesn’t have to shake you or your business plan. No matter what others may think, ultimately it’s you that has to be comfortable with what you’re doing and where you’re headed. After all, you’re the one that has to live with its success or failure.

Fast Company Blog Post: Building Buzz Around Your (Career) Brand

Marketing is marketing. It doesn’t matter if you’re a business trying to attract and retain customers or an eager job seeker trying to capture the attention of potential employers. Your ultimate success or failure will depend on your ability to position yourself (or your product if you’re a business) that addresses a problem people will pay you to solve.

Last week, I had a chance to be a fly on the wall at “Building Buzz Around Your Brand,” an event hosted by Grasshopper.com and MassChallenge at the Microsoft New England Development Center on the campus of MIT. Beyond enjoying the cool digs, attendees also learned marketing tips from folks from Brainshark (an entrepreneurial company with more than 150 employees), Holland-Mark (an advertising agency that boasts an average of approximately 37 minutes per visit to their website), HubSpot (an inbound marketing software provider whose blog gets more than 250,000 hits per day), and Grasshopper.com (a company that provides a mix of products and services to entrepreneurs–oh, and they are also responsible for this really cool video). Each speaker shared his perspective on brand building with the more than 100 people who were in attendance–a diverse audience which included recent MBA graduates seeking employment, entrepreneurs hoping to bootstrap a startup, folks who are gainfully employed in the marketing space.

Which marketing tips can help you build a buzz and stand out from the thousands of other job seekers you’ll likely be competing against ala the Google Job Experiment?

Read more.