After having described your main programmes and services for the business plan, you will now describe what price or fees you are planning to charge for those. In order to come up with a price you need to consider three main areas, which are depicted below:

• CUSTOMER:
  In your market analyis you will ideally have identified customer profiles and found out how much you can charge for your programmes and services from the target group(s). This is especially important if your mission statement refers to training of SMEs or social groups like unemployed workers – these target groups might only afford a level of contribution that will not cover your costs. You will have to ensure that a third party pays for your activities, e.g. government schemes, bilateral or multilateral donor organisations, big companies as sponsors, etc.

  The other components of your marketing mix (programmes/services, promotion and distribution) can help you to become more independent from the price. Your customers could be willing to pay more, because your offerings respond better to their needs (delivered to remote locations, flexible timings, international expertise, etc.).
  
  

• COST:
  Please be aware that you need to compare your prices with the costs of your operation. As a principle, at least the costs created directly by the programme or service offering (e.g. programme staff time, consultants/experts, secretarial support, facilities rent, purchase of equipment, printing cost, catering ) have to be covered by the income generated through them. You will also have to include a percentage of fixed cost (e.g. administrative staff, rent, energy costs) coverage in case they are not covered by separate funds.
  
  Programmes/services not covering their full costs should not be offered - except if you can get enough third party funding for it or if you see it as a long-term investment that you have calculated will pay off after a certain time.

 

• COMPETITION:
  Your prices and fees need to be within a certain range compared to your competitors. It makes no sense to offer your programmes/services much below the prices of your competitors – you would destroy the market! On the other hand, it is difficult to charge reasonable prices (covering full cost) if your competitors offer their services/programmes for much less. This can have basically two reasons: 1) your costs of operation are too high 2) your competitors have high 3rd party funding.