Not all prices in this range are acceptable. The range includes possible prices where the owner might not cover the costs of the supplies needed in the service. The next step is to narrow this range by determining the basic costs of doing business. Selling products at a price that does not cover costs means failure in the long run. The major cost items to consider are direct costs and indirect costs.
Indirect costs are the costs associated with running the business.
Fixed expenses such as rent, utilities, labor costs for office employees, property insurance, taxes, licenses, dues, and subscriptions Variable expenses such as office supplies, business travel, advertising, sales commissions, and marketing. Developing the cost data allows you to set a price, based on a certain volume, where revenues will cover underlying expenses. For a service business however, covering your costs represents only a small part of the typical service price. Two additional factors play a significant part of the final price. First, many owners who work in their own business fail to adequately compensate themselves for the value of their efforts.