28/03/2026
CALCULATING THE PRICE OF YOUR PRODUCT
When I first got into business, I always thought that I will be a millionaire in 6 months 😂.I mean I had the perfect plan, with a crisp clean sales pitch and a good starting point.
In my head clients would come running to my business everyday and I wouldn't struggle to make a single cent. Well I launched my business, with the knowledge I had, clients came rushing in, well at least I wasn't wrong about that part.
But I quickly realised that I did not know what I was doing, business is more then just clients and profit. Business works like a machine, if there's one part that isn't serviced properly or a part that isn't working properly. It'll affect your whole business process.
Well my problem at the time wasn't, my product or getting clients. But it was delivery, how do I get products to clients on time and in time. The more I tried to solve this problem, the more I realised that, even the price of my product at the end of the day, did not make sense.
Cos now I had to cover operational costs, delivery costs, marketing costs and production costs. At this point I realised that every cent counts, and I had not factored that in. Which resulted in me making a huge loss, cos when I was calculating what it took for me to produce one product.
The cost price of a single unit, could not match up or cover the costs of even producing one product.
A lot of the times businesses fail not because they are not good. But because we fail to plan the right way, a business plane is basically an outline of why you are starting the business, who is your ideal client, how do you plan on getting that client, how long will it take you take get that client,
What will it cost you to get that client and what is your projected time period. For a small business it would be the latter but at a small scale factoring all income and expenses.
But one valuable lesson I learnt is that, you don't make up the cost of your product from your head, you calculate it from your expenses and your projected income, from calculating your unit cost and how much you spent to produce one unit.
