Posts Tagged ‘business factors’
Pricing and Cost Factors – Each component of a product or service has a different specific cost.
Many small businesses do not analyze each component of the total cost of your product or service and, therefore, do not set prices that give them a good profit margin.
Once you make this analysis, set prices to achieve higher gain and eliminate any unprofitable service.
The cost components include materials, labor and overhead costs. The materials include the cost of all materials that are or integrate the product, such as wood, glue and surfaces in the manufacture of a chair.
The labor costs are the labor that goes into making a product. An example would be the wages paid to workers in the production of a particular product.
The direct costs of labor are obtained by multiplying the hourly cost by the number of staff / hours it takes to complete a job. Remember to use not only the wages paid by the hour but also the monetary value of fringe benefits. Read the rest of this entry »