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Pricing Strategies

Pricing Strategies

What's the best way to establish a price for your products or services?

Getting your pricing right is crucial. Put your prices too high and your customers may desert you; put them too low and you’ll generate sales but won’t have a large enough profit margin to create healthy revenues and cashflow for the business.

Whether you’re a new startup, or an established business, choosing the right pricing strategy is a fundamental part of designing your business model. As such, pricing is something that’s likely to take considerable thought, research, planning and analysis over the lifetime of your products.

So, how do you know what to charge for each product and/or service? And how do you decide a price point that’s both competitive AND profitable for the business?

Costs, margins and hitting the right price point

For your business to be viable, you have to know for certain that you can:

  • Find and win customers
  • Meet your project sales and revenue targets
  • Cover your running costs, overheads and operating cashflow
  • Generate profits and get a return on your investment.

But how does this all come together to define your final sale price? The answer is to have a granular understanding of your costs, your margins and your pricing – and also to know who you’re selling your product/service to.

Different ways a price can be worked out

Cost price

When you make a product, or deliver a service, you need to spend money to do that. This expenditure includes the raw materials, the business overheads and the labour costs of creating your product/service.

By adding up all these expenses and dividing them by the number of units you delivered, you get your cost price. In other words, it’s the total cost of the unit before any margin or profit is added.

Wholesale price

Your margin is the amount you add on to your cost price to make a profit.

So, if my cost price per unit is $5, I might sell each unit to a wholesaler at $7.50. By doing this, I recover the cost of making the unit (or ‘Cost of Goods Sold’ in accounting terms), and I make a profit of $2.50 on each unit I sell to my wholesale client. This is the wholesale price.

The wholesaler will then add on their own margin in order to sell it to a consumer at. Using the example above, if the wholesaler sold each unit for $10. You make $2.50 and the wholesaler makes $2.50.

Retail price

This is the price when you sell the product to a consumer. The retail price factors in margins and comparing prices within the market to ensure you're competitive but still turning a good profit.

So, if you sell direct to a consumer, at a price of $10, and your cost price is $5, then you’ll make $5 profit for every unit you sell.

This contrasts with $2.50 profit per unit if you sell to a wholesaler, although you’re likely to sell in bulk to a wholesaler and will make your profits through this economy of scale.

Premium or economy pricing

Knowing how to position your product/service in the market is important.

Are you selling a premium product, with a high price tag? Or are you selling an economy product, with a low price point? There’s a big difference between selling a limited number of units at a high price (and high profit), and selling a big number of units at a cheap price (low profit but larger sales).

Positioning your prices between these two polar ends of the pricing spectrum isn’t easy, and will take time, experience and plenty of experimentation to get right.

Knowing when to discount or increase your prices

Your price isn’t a static thing.

Costs of production will increase, markets will change and sales campaigns will require discounted prices. So it’s vital to continually assess, review and update your prices.

For example, you could run a discount to increase sales, decreasing your margin and selling more units. Or you could choose to put your price up to increase your margin and make things more profitable.

What’s important here is to know how price-sensitive your customers are, how loyal they are to the brand, and what they’re willing to pay for your specific products/services.

Pricing is a complex and difficult area to get right, so working on your pricing is something that should be done on a regular basis.

If you’d like to review your current pricing strategy, please feel free to talk to us. 

Leadership lessons: JUST FOR ME

Leadership Lessons

JUST FOR ME

There are thousands of books written about leadership. We’ve distilled some lessons from some of them into the acronym JUST FOR ME. Nine things within your control to help you become a more effective leader.

1. Just do it

So often we get in our own way of implementing our ideas. Stop limiting the business’s potential and prioritise your time to ensure the important things get done.

2. United vision and values

Your vision is where you want the business to be in the future; your values are the compass that drive your behaviour to get there. Clarify and articulate these ASAP.

3. Safety

It’s a leader’s job to ensure physical and emotional safety for their team at work. This goes beyond legal obligations; the safer employees feel at work, the more productive, innovative and loyal they’ll be.

4. Teamwork and Trust

Form a team of people who are smarter than you in different ways, using your collective expertise to achieve results impossible to achieve alone. Build a culture of trust so your team know they can rely on you and that the feeling is mutual.

5. Focus

Bring focus to each team member’s individual contribution towards achieving the business goals and vision. Provide clear key performance indicators to ensure everyone knows what to focus on.

6. Opportunity

Look for the opportunity in every mistake, challenge and difficult situation. These are key sources of learning.

7. Resilience and Resourcefulness

Resilience helps you recover quickly from difficult situations; resourcefulness helps you find quick and clever ways to overcome difficulties. Build resilience and resourcefulness in your team and yourself.

8. Mindset

This is the attitude you bring to your role as leader. Do you have an abundance mindset or scarcity mindset? Do you take ownership, accountability and responsibility for your actions? Your mindset has a huge impact on how you and your team feel about coming to work each day.

9. Empathy and Energy

Empathy is the ability to see things from another’s perspective. For example, instead of disciplining a team member for struggling, first seek to understand why they’re struggling, then offer support and training. Increased empathy increases energy across the team and the business and improves results.

Take these nine factors and make a plan for how you can develop your leadership skills. Which one will you focus on first? 

“Success is neither magical nor mysterious. Success is the natural consequence of consistently applying fundamentals.” - Jim Rohn

JobMaker scheme – key points

JobMaker Scheme - Key Points

The JobMaker hiring credit scheme is now open for registration.

Here’s a summary of some of the key points around the JobMaker scheme.

If you are considering applying for JobMaker, please take into consideration the administration of JobMaker can be quite complex, so we don't recommend attempting to manage this on your own. Talk to us about how we can assist.

For background, JobMaker was announced by the government in the October 2020 federal budget, and will operate until 6 October 2021.

Key points:

  • Key to the hiring credit scheme is that employers must have added additional employees and also have increased their payroll during the relevant JobMaker period, as compared to a baseline date.
  • The hiring credit is backdated to 7 October 2020 (applying to new employees from that date) and will provide eligible employers with the following payments for up to 12 months for new jobs created from that date.
  • Eligible employees must work an average of at least 20 hours per week over a JobMaker period for the employer to qualify for the payment in respect of that employee. They must have commenced employment between 7 October 2020 and 6 October 2021, were aged between 16 and 35 years at the time they commenced employment, and worked an average of 20 hours a week for each whole week the individual was employed by the qualifying employer during the JobMaker period.
  • The JobMaker payments for up to 12 months for new jobs created are:
    a) $200 a week for hiring a worker aged 16 to 29 on at least 20 hours a week during the JobMaker period and
    b) $100 a week for those aged 30 to 35 on at least 20 hours a week during the JobMaker period.
  • Employer eligibility criteria are broad. Some employers are specifically excluded. These include:
    • employers who are claiming JobKeeper
    • entities in liquidation or who have entered bankruptcy
    • commonwealth, state, and local government agencies (and entities wholly owned by these agencies)
    • employers subject to the major bank levy, and
    • sovereign entities (except those who are resident Australian entities owned by a sovereign entity).
  • Entitlement to a hiring credit payment is assessed in relation to three-month periods known as “JobMaker periods”. These periods are relevant for the purposes of the additionality criteria (refer first point).
  • Claims can only be made during the claim period. No exemptions or extensions are available. There are strict dates by which claims for a period must be reported by. The credit is paid every 3 months in arrears to employers.

As mentioned at the start, this is a summary of some of the key points around JobMaker. There are many other requirements and a thorough understanding of those requirements are needed to ensure your JobMaker administration is correct. 

Talk to us if you need support in applying for or administering JobMaker.

Leveraging your technology


Leveraging your technology

The decisions you make in your business are only as good as the data you use to make them. The more accurate and up to date your data is, the better your decisions will be. Leveraging your technology will provide you with accurate real-time data to make more informed decisions in your business.

Processes and systems drive your business, so it’s important to ask yourself if all of yours are clearly documented and up to date? Some processes may be followed simply because they always have been. Although other processes may have evolved over time, your documentation might not necessarily reflect this.

Using technology to streamline your processes and systems increases efficiency in your business, saving time, money, and reducing stress. You’ll also prepare your business for the future, making it more sustainable, scalable, and saleable.

Leveraging your technology can help you to:

  1. Make your data accessible from the cloud, allowing you to view real-time data and make decisions on the go.
    Example: Xero.
  2. Reduce human error and increase productivity by automating repetitive tasks and workflows.
    Example: Asana for workflows.
  3. Track your expenses and load them directly to your accounting software simply by taking a photo.
    Example: ReceiptBank.
  4. Minimise double handling and increase efficiency by integrating your apps.
    Example: Xero Marketplace.
  5. Collaborate with your team regardless of where they are.
    Example: Slack and Microsoft Teams.
  6. Save the time and money needed to travel by using online meetings.
    Example: Zoom and Microsoft Teams.
  7. Induct new team members seamlessly with clearly documented processes.
    Example: Deputy.
  8. Monitor your inventory in real-time, reducing inventory days and freeing up cash.
    Example: Fishbowl and Unleashed.
  9. Store customer preferences to personalise customer experience, increasing customer satisfaction and retention.
    Example: Vend and Kounter.
  10. Make your business become scalable with systems in place to allow the business to grow without the wheels falling off. Talk to your business adviser. 

Using technology to its maximum advantage will help to improve your business. However, implementing these changes can often be overwhelming.

Talk to us about any of the above technology to improve efficiencies in your business.



Building a better business in 10 steps

Building a better business in 10 steps

There’s no magic bullet to building a better business; it’s about taking small steps every day to get a bit better than the day before - it all adds up!

Owning and running a business is not easy. And at times you might question why you’re even doing it, particularly after the impact Covid-19 and the associated lockdowns had on business.

But you’re here because you had a vision. You decided being in business was a better way to achieve that vision than working for someone else. And, you’re right; you just have to work on it.

It's likely that you're an expert at what you do. Maybe you’re a tradie and know plumbing or carpentry like the back of your hand. Or, maybe you’re a restaurant who can dish up delicious meals. This doesn’t mean you’re an expert at running your business though. It’s hard taking time out of working in your business to work on it. But doing this is essential for its success.

There’s no magical overnight solution to building a more successful business. It’s about taking small steps every day to get a bit better than the day before.

So, what should you do to build yourself a more successful business? We’ve broken it down into 10 essential steps

Ten steps to building a better business

  1. Get clear on exactly what it is that you want.
  2. Be open to change and new learning.
  3. Define where you are now (warts and all).
  4. Make a plan.
  5. Get your organisational structure right.
  6. Be a better leader.
  7. Be held accountable by someone independent.
  8. Build strong networks.
  9. Monitor your progress.
  10. Keep your well of happiness full.

These are the 10 most important things you should be working on to ensure you achieve your goals. Small, incremental changes can have a massive effect on your success.

We’re here to help you, every step of the way. Get in touch!

“Success isn’t overnight. It’s when every day you get a little better than the day before. It all adds up.”  Dwayne ‘The Rock’ Johnson


xeros short-term cashflow feature

Xero’s short-term cashflow feature for businesses

Xero's short-term cashflow feature for businesses


Business cashflow is simply money coming in and money going out of the business. Your outgoings will include things like rent, payroll, taxes and supplies. Your income will be revenue from sales but might also include investment funds or the sale of assets.

For most businesses, income and expenditure don’t always happen at the same time so focussing on strong cashflow management will help you prepare for the shortfalls and also manage surplus income.

Cashflow reports allow you to look back at cashflow in your business. This can uncover cashflow patterns over time and show you how much money you need to run your business each month.

Cashflow forecasts look forward by combining payment dates and due dates for invoices, to give you an idea of what your cashflow will be like going forward.

Managing healthy cashflow

Xero’s short-term cash flow feature gives you an up-to-date dashboard view of your organisation's cashflow. You can choose multiple bank accounts and see the projected cashflow over 7-30 days. The more information you include, the more accurate your forecast will be.

Healthy cashflow management gives you better control, so you are more prepared for growth or for the unexpected. Read the article at Xero Central to learn more about this feature.

We can help. Talk to us about improving your business cashflow.

Lessons learned in lockdown

Lessons learned in lockdown – for your business and life

Lessons learned in lockdown – for your business and life

Lockdown has been (and remains) a tough time for business.

Having to shut your business at short notice, or switch to an entirely digital, remote-working model, was a stressful experience. But there are things we have taken out of lockdown. Whether it enabled us to explore new ideas or dive into some fresh thinking regarding work, life or a business venture.

So, what lessons did we all learn from this enforced period of business shutdown, quarantine and remote working?

Carrying over the positives from lockdown

Suddenly, your office space lay empty, your employees were spread across various home locations and (crucially) your customer sales and revenue evaporated in the blink of an eye. The amazing thing about human resilience and ingenuity, however, is how quickly businesses DID evolve to cope with this situation.

Teams got used to home-working, video meetings and dealing with customers in the online space. And many of us began to see the positives of this low-impact, remote-working approach.

Are there things you can hang to now in the return to working life?

More time with family

With the daily commute no longer needed, and the ability to work remotely from our own homes, everyone had far more time to spend with their family, their partner or (via video calls) their wider circle of friends and family. Although enforced time together may have added a few strains, this extra time with our nearest and dearest is something we are grateful for – and should aim to continue.

More exercise and fitness time

finding the time to fit in a gym session or run was always tricky. The quieter pace meant that many could follow the latest workout video, go for a run, or get back on our bikes. We know exercise is good for both our physical AND our mental wellbeing - so it's important to keep this in your daily schedule going forward.

Future planning

working ON the business, rather than IN the business is an aspiration of any ambitious owner, but the time to do this is usually scarce. In lockdown, we’ve had far more time available to think through our core goals, what our next move should be and what our ‘post-coronvirus strategy’ should be.

Using data to understand your customers

Intuition is vital for business owners but if there’s data in your business that you haven't had the time to review, you may be missing opportunities. For some, lockdown provided some time for analysis such as, learning to use Google Analytics to understand how your customers find you, what your popular pages are, and which products are selling.

Getting in control of your financial model

 Huge drops in revenue have meant cashflow worries. We've been assisting clients to re-evaluate their financial model. Looking at costs, debts and potential revenue streams allows you see how you can reduce cash outflows and boost those all-important cash inflows. Reporting on these metrics will continue to support your business decisions.


None of us know exactly what the ‘new normal’ of business trading will look like. But if you want to be ready for a different kind of business reality, we can help. We’ll work with you to update your goals, strategy and financial model – so you’re ready for the future.


Talk to us. We are here to help.

Inventory Management Best Practices for Retailers

Inventory management best practices for retailers

Inventory management is incredibly important in retail and yet studies reveal that 43% of small businesses either don’t track inventory at all, or do it manually. Proper inventory management can be the difference between a lost sale and a lifelong customer.

Here are some quick tips on how you can stay on top of stock control:

Understand the relationship between sales and inventory

Look at inventory and sales data together so you can see the relationship between the two.

For example, if you pull your sales results and see that dresses are 20% of your sales, and jumpsuits have only generated 4%, the instant reaction is to buy more dresses.

However, if you simultaneously look at your inventory results, you may see that while dresses generated 20% of sales, they represented 40% of your inventory, while jumpsuits generated 4% of sales but on 1% of your inventory.

By considering the relationship of sales to inventory, you might discover you are over-inventoried in one item, and missing opportunities to sell another.

Manage residual inventory to control costs and preserve profit

Residual inventory is what remains at the end of one selling season and is carried into the next season. A few examples include wool apparel that is on sale in the spring season or outdoor furniture sets that are marked down after the summer season.

An effective way to manage this is to create season codes with style numbers when you enter items into your inventory management system. This can make analysing sales and inventory by season a significantly easier task.

Equip your business with the right inventory management tools

From choosing the right inventory management software to finding a POS solution that fits your business, it’s essential to implement tools.

The right ones will integrate together to streamline and automate processes, making inventory management more accurate and efficient.

In a competitive market, knowledge is key to business success.

We can help you understand and integrate inventory management apps into your retail business. Get in touch to discuss how.

covid-19 advice for employers

Covid-19 Advice for Employers

Covid-19 Advice for Employers

Employers are facing unprecedented changes to the way of working, and many employers are having to do this with little or no preparation for such adversity.

The Fair Work Ombudsman has updated their information on Coronavirus and Australian workplace laws to provide advice to employers on managing the situation. The advice is general in nature and reminds employers that the usual provisions of the Fair Work Act apply.

It is important to note that the Fair Work Act does not have specific provisions or rules for a situation like this, that has such an unforeseen effect on business and employers.

Employers and employees need to come to their own arrangements. Employers must communicate with employees what their policies will be in this situation, making sure that they are lawful within the Fair Work Act provisions.

The Fair Work Ombudsman provides guidance on many topics including:

  • Health and safety in the workplace.
  • Directing employees to stay away from the workplace.
  • Quarantine and self-isolation.
  • Working from home.
  • Casual employees and independent contractors.
  • Redundancy and reduction of hours.


Essential Information for Employers

There is a great deal of information being published, and we encourage you to stay updated with the official websites.


What you need to do

We suggest you write a policy and plan for the business management of Covid-19 and provide this to employees as soon as possible. This should include guidance on working from home, productivity measures and expectations, personal hygiene, workplace safety, flexible working, user access to relevant tools and technology, leave policies, online security and safety, team communications, as well as any procedures or policies relevant to your business and industry in this situation.

Remember, stay safe and maintain connection and communication with your employees throughout this challenging time.

Need help navigating the support packages available?

Talk to us. We are here to help.


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