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.