4 Pricing Strategies that Work for Small Businesses

Editor's Note: This article part two of a two-part series. Part one focused on pricing mistakes small businesses need to stop making. This article addresses pricing strategies that work for small businesses.

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Deciding on a price for a product or service is exponentially more complicated at a small company. Small companies and startups not only lack the historical data often necessary for pricing analysis, but many of them operate in niche industries where the majority of competitors are privately held and offer no visibility into their pricing models.

With that in mind, are there a few pricing strategies that small companies can use without "winging it," even in the absence of mathematical models and 100 years of economic trend analysis.

Pricing Strategy #1: Set Your Price Relative to Value or Quality

Overview: In its simplest form, this pricing strategy involves setting your price in direct proportion to the value or quality level you wish to project in relation to competitors—a higher price being indicative of a more valuable (or higher quality) service than a lower price.