Price is a promise Let’s say you’re shopping for cereal and come across two varieties. One is a well-known brand in a resealable 20 oz. package, which comes with a toy and sells for $4.99. The other is a store brand, that’s packaged in a non-descript plastic bag and sells for $2.99. Which do you buy?

If price was your only factor, you’d buy $2.99 brand. But there are other factors. In this example, $4.99 box promises you reputation of a well-known brand, a toy to entertain your kids and convenience of resealable packaging. Remember that a price guarantees all promises wrapped up in your product or service.

Determine your promises Before you ever touch a calculator, first take stock of all value factors that are bundled into your price. If your company sells a product, these might include: ·the performance of your finished good ·your distribution capabilities or ·your service and installation services.

If yours is a service, value factors might include: ·the bottom-line impact of your deliverable ·your company’s ability to meet tight timelines. ·your experience level.

Pricing financially After taking stock of all your value factors, grab a calculator. First, add up all your direct costs (those incurred as a result of delivering your service) which include labor and raw materials. Then, add up all your indirect costs (all other costs that aren’t direct) like rent, insurance and utilities.

Now, identify profit your company needs to attain in order to fuel new investment and reward your employees. Finally, forecast what your annual unit volumes will be. Now, divide total of your costs and profit by annual units sold, and you end up with a unit price. Sure, this is a simplified example, but process is sound. This kind of analysis will help ascertain where your prices should be from a financial perspective.

(The) Donald Trump is an excellent example of American entrepreneurism in its most colorful form. Synonymous with New York real estate, beautiful women, bad hair, 90-story ego, distaste for dishonesty, and a clear killer-instinct in business world, Trump also knows how to use people to make money for him.

Yet Trump is no exception when it comes to overcoming episodes of failure or great hardship. In late 1980’s when he fell into default with his mortgage lenders his back was definitely against wall. But negotiating skills pulled him out of this slump with hardly a missed heartbeat. Love him or hate him, he certainly creates brand recognition.

His new reality show, The Apprentice, takes place in unforgiving business world of Manhattan as eight women and eight men (all entrepreneurs in their own right) are chosen out of more than 200,000 applicants to compete for ultimate prize: running one of Trump’s companies with a huge salary.

20 million viewers watched for three months while Donald Trump outlined buy-low-sell-high mindset of marketing, and each week they were divided into two teams and given their assignments. Each week one was “fired” for reasons such as choosing candor over loyalty, misconduct, or dishonesty.

As a viewer there was much to learn about what it takes to make it in business.