Your prices are what carry you in your business, allowing you to continue providing the goods or service to your client. We like to think of the science of pricing as the saddles on the workhorse of your business. Just as any good cowgirl knows her saddle and each part that needs to be in place before riding, so you need to know the science behind your pricing. You need to know that your prices cover your expenses and create a profit for you. The investment your clients make to work with you or purchase your product is not just a number you pull out of your boots or hat. This is a number with a reason.

Here are some questions that will help you to think through your pricing structure.

1. Do you know what percentage of your selling price is the cost of creating the goods or service?

2. Do you know what amount is your pay as the business owner?

3. What are your overhead costs per item?

4. Have you calculated the percentage to set aside to pay your taxes?

5. Do you know what percentage is the REAL profit?

Here is what a breakdown of this could look like. Let's say I have a massage therapy clinic. The charge for an hour massage is $85.

1.The massage therapist gets paid $50 per hour of massage and supplies are $5. This means your cost of creating that massage is 65% of the price.

2. As the business owner you know you need to count $10 per hour massage for your pay.

3. Overhead is $10 per hour massage

4. This leaves you with a profit of $10 per hour massage, meaning you need to set aside $2 per hour massage for taxes.

5. This leaves you with $8 per hour massage as profit which would be 9.4% profit.

While the numbers above are fictitious numbers it give you an idea how to answer the questions to determine if the science of your pricing is correct.

Now "saddle those prices" and ride this business to the best year yet. And remember when you see the saddle icon around these parts you are about to be imparted some wisdom surrounding the pricing of your commodity.

Cowgirl Jo