The subject of pricing reared its ugly head again recently when my partner and I had a heated discussion about what price to quote for two projects we'd been invited to tender for. I felt my partner was going in too low and that we were undervaluing both the quality of the work and our time. He, however, felt that the quotes I wanted to give were too high and that we would lose out on the jobs. As ever in business we compromised somewhere in the middle, but it did raise the thorny issue of where we should set our pricing.

What you decide to charge for your product or service is one of the most important decisions you will make as a business person. Both too high and too low will cause you potential problems with your sales and cashflow and will affect the growth of your business. This isn't purely about new businesses as it's also important for established businesses to carry out regular reviews of their pricing to help improve their profitability. Plus, of course, new and growing businesses must always be aware of what their competitors are doing in terms of pricing.

Perhaps you are in the situation where you know you want to start your own business, but have the really tough dilemna of choosing what type of business to open. People using a particular skill or expertise often take it for granted that they will start a business in that area, but the same isn't true for all of us.

Some entrepreneurs are actively trying to leave a previous career behind or have several ideas but need to pinpoint the one that will be most profitable. Finding the next big thing or current hot areas is not easy, otherwise we'd all be millionaires. Plus, once a new trend emerges it's often then flooded with businesses, which means survival of the strongest. So, you've got to get in fast, and be the best. Your choice of business will also depend on your budget. Do you need office space, stock, staff, kit? All this costs money, and so the lower your start up costs the better chance you will have of success.

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As if times aren't hard enough for start up businesses, we now hear that the UK's small businesses are paying up to three times as much for goods and services than big businesses who enjoy large savings from their favoured suppliers. Research by Huddlebuy.co.uk has shown that small businesses are paying £3.6 billion more which, for start ups, equates to £1,200 per employee. With so many SMEs struggling this is clearly an unfair cost that actually threatens the idea of an enterprise led economic recovery.

You might think it's not all that important to have a good understanding of how much money is being paid out each month in expenses, but this knowledge actually allows businesses to keep their taxes in good order, identify trends and, where needed, put new policies in place.

A study by opinionmatters.co.uk has found that around 20% of small businesses don't know how much they are paying out in expenses, with 40% saying that only their accountant knows the monthly expenses costs. Relying on an accountant only isn't an ideal situation as they don't have as full an understanding of your business as you and it's important for business owners to see what the outgoings in their business are. How else can an efficient business be operated?

Do you agree? Do you know how much is paid out in expenses by your business every month? Let us know.