Let’s pretend, for a moment, that you created a widget or service and it cost you $300 to make or provide. You determine that you could make a really good widget or provide a really good service and a few other folks believed you so they invested money in your company to do just that. Now in order to provide a return on investment (ROI), you decide that the price people should pay for your widget or service is $1,200. Sure, it’s a 75% margin but you think people will like it and a there is a history of people paying for it so off you go. Start the negotiating. Over time you find that some markets stop paying or aren’t capable of paying that much for your widget or service. However,...
Full Story »