Business Costing and Pricing

About this course

Setting a price is one of the most important decisions a business makes, and many owners guess at it. This course shows you how to separate fixed and variable costs, calculate margins, find your break-even point and choose a pricing approach that fits your market. You'll finish with a simple way to communicate price changes to customers without losing them.

What you will be able to do

• You'll be able to separate fixed, variable and direct costs and use them in a costing
• You'll be able to calculate gross and contribution margins for a product or service
• You'll be able to find your break-even point in units and in dollars
• You'll be able to compare pricing approaches and communicate price changes clearly

Course outline

1. Understanding Cost Types

   10 min · Lesson notes, example, action task · 2-question quiz

   Good pricing starts with knowing what things cost. Fixed costs stay the same whatever you sell, variable costs move with sales, and direct costs can be traced to a specific product or job.
2. Calculating Margins

   10 min · Lesson notes, example, action task · 2-question quiz

   Margin shows how much of each sale you keep after paying the costs that vary with it. Knowing your margin for each product tells you which ones are worth pushing.
3. Finding Break-Even Points

   10 min · Lesson notes, example, action task · 2-question quiz

   The break-even point is the level of sales at which you cover all your costs and make neither a profit nor a loss. It shows how many sales you need before the business starts to earn.
4. Pricing Approaches

   9 min · Lesson notes, example, action task · 2-question quiz

   There are several ways to set a price: cost-plus, competitor-based and value-based. Most businesses combine them, starting with cost and checking against what customers will pay.
5. Communicating Price Changes

   9 min · Lesson notes, example, action task · 2-question quiz

   Customers accept price changes more easily when they understand the reason, see the value and get reasonable notice. Clear communication protects relationships and reduces churn.
6. Tools you'll need

   6 min · Lesson notes, example, action task · 2-question quiz

   A cost sheet and break-even calculator can be built in a spreadsheet. Accounting and inventory software can help you track real costs as the business grows.
7. Careers & next steps

   6 min · Lesson notes, example, action task · 2-question quiz

   Costing and pricing skills are valued in finance, commercial, operations and small business roles. This lesson sets out where they lead and how to check what the work is worth.
8. Final quiz and certificate

   10 questions, pass mark 8 of 10. Pass to get your Reesby Academy certificate with a verification link.