The owners' goal: to increase their profit on invested funds

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First of all, you need to know what the business itself wants to achieve. The choice of pricing method, as well as the entire logic and calculation period, will depend on this. For example, it is important for some to "capture" the market. Then you need to act more aggressively. The main goal of others from the point of view of strategic development is to bring a new product to the market.
To consolidate all the material, let's look at a numerical example of how a company that produces unique scented candles sets prices for its products.


Step 1

After setting the goal, you need to determine the characteristics of your own product in order to understand how much money you need to spend on its production and sale of goods.

Let's assume that variable costs per candle are 55 rubles. Fixed costs, including all chile phone number list advertising costs, depreciation, etc., are 1,000,000 rubles.

The owners invested 1,000,000 rubles and want to receive 15% per annum. The maximum productivity of the workshop is 3,000 candles per year.

Then our financial goal is to cover all fixed costs and get a profit of 15%. Goal: 1,000,000 + 1,000,000×0.15 = 1,150,000.

Next, before calculating the cost of the product, we first find the overhead costs. To do this, the financial goal must be divided by all candles produced per year.

Overhead costs = 1,150,000 / 3000 = 383 rubles.

Then the full price is equal to the sum of overhead and variable costs: 383 + 55 = 438 rubles.

So we found a base price - at which we can sell the product to distributors.

Step 2