Alongside your knowledge of margins, you need to have a strategy in place that covers how services are priced, how to deal with income and expenses, how to accumulate reserves for your business, and know what your salaries & overheads are.
When you are developing your business at the very beginning, you may have prices in mind based on the current relationships you have with suppliers and the costs you are given, but these can change over time, as well as your business expenses due to salaries, cost of sales, and many other running costs. As the business develops your pricing strategies will have to develop with it. Knowing your costings, your outgoings, and your margins are an essential part of your profit plans.
With this information, you will have the clarity to be able to create a strategy for your pricing. We recommend that you go back to this regularly, as well, to be in alignment with your business plans and the status it is in.
