Value Chain Analysis

Good Essays
Production and Operation
Management

Group IV
BSEM 3-2

Product Design Parameters

Members:
Bulaong, Jennifer E.
Velasquez, Pauline L.
Fernandez, Rose Ann F.
Escoto, Gellian

Prof. Rizza Valdez

Nine Factors to Consider When Determining Your Price

1. Your Costs
If your rate doesn’t include enough just to break-even, you’re heading for trouble. The best thing to do is sum up all your costs and divide by the number of hours you think you can bill a year. Whatever you do, DON’T think you can bill every hour. You must account for sick days, holidays, hours working on the business, hours with no work and so on.
Also make sure you factor in all the hidden costs of your business like insurance, invoices that never get paid for one reason or another, and everyone’s favourite – taxes.
2. Your Profit
Somewhat related to your costs, you should always consider how much money you are trying to make above breaking even. This is business after all.
3. Market Demand
If what you do is in high demand, then you should be aiming to make your services more expensive. Conversely if there’s hardly any work around, you’ll need to cheapen up if you hope to compete.
Signs that demand is high include too much work coming in, other freelancers being overloaded and people telling you they’ve been struggling to find someone to do the job. Signs that demand is low include finding yourself competing to win jobs, a shortage of work and fellow freelancers reentering the workforce.
4. Industry Standards
It’s hard to know what others are charging, but try asking around. Find out what larger businesses charge as well as other freelancers. The more you know about what others are charging and what services they provide for the money, the better you’ll know how you fit in to the market.
5. Skill level
Not every freelancer delivers the same goods and one would expect to pay accordingly. When I was a freelancing newbie I charged a rate of $25 an hour for my design, when I

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