For Start-Ups, Getting the Basics Right Isn’t Easy

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Things like pricing and finding your market and niche are extremely important to the success of a new startup – but getting those basics right is a lot harder than you think.

Setting pricing for your product or service can be tricky, says business mentor David Strom. Study what your competitors charge, he advises, and experiment with pricing with different clients to see what you can get. Further, conduct a sensitivity analysis or a well-structured survey for other data points on your customers’ willingness to pay. Experiment with different combinations too, like volume discounts, bundles and value-added options. Understand that there’s value in what you do, so you don’t want to undercharge for it.

Another common mistake startups make is setting their market too wide so they don’t have the resources to adequately serve it. It’s better to be as narrow and as deep as possible than to be spread wide and thin, Strom says. You want to continually find a narrower niche and evolve with that market to become the dominant player. You’ll do best by targeting the markets and customers you know and understand.

Adapted from Advice for Startups at Datamation.