Money and Finance
These Savvies explore the topic of Money and Finance in more detail —
So far, we’ve been considering product sales, but running the numbers applies to many other areas of your business as well.
One of our first examples of “running the numbers” had, as one of its factors, the production cost of a CD. It probably doesn’t surprise you that the cost of production is important; but it may surprise you that, once again, the “obvious” answer can be the wrong one.
Now you may be protesting “that’s fine for a pastry shop. They deal in pennies. But speakers don’t need to be that precise, do they?” Well, sometimes they do.
But what about actually increasing your marketing costs? That’s not very smart, is it? Again, it depends — run the numbers!
Now let’s consider another “what if” scenario. Specifically, what if you increase the price of your product? What happens?
Now that you’re convinced of the importance of running the numbers, let’s turn our attention to the primary reason speakers use numbers — pricing their speeches, products, and services.
Before you explore how to determine the appropriate price for your speech (or other product), let’s consider several reasons why the fixation that many speakers seem to have on their speaking fees simply isn’t justified. For example….
Now that you’ve seen that speaking fees are not your sole concern (and possibly not even your primary concern), let’s start exploring how you can go about pricing your products and setting your fees. An important consideration in pricing your products (whether they’re physical resources or programs that you present) is the resource’s “preconceived value”. (Not its “perceived value” — which we’ll talk about later. This is its preconceived value.)
Another way of determining the price or fee that you charge for something is to determine the costs of producing it. If you want to make a profit by selling the product, you obviously need to charge more to purchase it than it cost you to produce it.
Earlier you considered production costs in producing a physical product. But production costs apply to your speeches and programs too. And knowing what your production costs are will help you enormously in setting your fees.