pricing strategies according to a FilChi entrepreneur
One stormy day of 2006 where trees were swamped away and power failure caused even MOA to close down at the hour of 6PM, 2 Chinese businessman, 1 Filiponly, and Maxx were fortunate to see a restaurant still open at BlueWave, Macapagal Boulevard. After dinner, I was pestering Mark (currently managing a packaging business) how to run a business as I am currenly developing a tool for our family business.
He told me the very basic that we learned in Business School that I have took for granted. Now, I realized that everything that was thought in college was actually beneficial to run a business. To make things short, its price of a product = fixed cost + variable cost.
The insight however was fruitful to my end. As how I do not entirely know what to include and how much. He says that I should include all costs such as rent, utility, manpower, materials and other costs. The summed amount is then divided to the volume of the production so we can get the initial cost. According to neGOsyo, we should at least price our product 150% to 200% higher at a premium to leverage income.