Social entrepreneurship through cultural heritage-CHEER - EN

Every product and every service has its price when you start a commercial business. The price policy obviously includes everything to do with the price. So it's not just about the "regular" price, but also about discounts, promotions, terms of payment, etc.

You always design the price with a view to your competitors, but of course also with a view to the costs you incur. You calculate these by including different components. These are above all:

- the material costs,

- Depreciation costs, i.e. the acquisition costs of buildings, machinery, vehicles, etc., spread over the useful life of the asset, are recognized in the income statement,

- labour costs,

- any usage fees for licenses, leased equipment, etc. (usage costs),

- Costs for trade, transport, storage, insurance services, etc. (service costs),

- Interest on loans (interest costs),

- Taxes and duties.

On these costs you then add the profit that you would like to achieve per product. Then you know at what price you would have to sell your product. Now it has to be checked whether it will also find a customer at this price.

To calculate your cost price, you can also use a template from the Internet. For example, there are pre-programmed Excel tables with which you can easily calculate this. If you have a little sense for numbers, you can also make a quick calculation. This is what most entrepreneurs do in practice when they first want to test whether a product is worthwhile. Later in this video we will take a closer look at this aspect.

Cost price calculator (free on the net): https://www.controllingportal.de/Marktplatz/Excel-Tools/Selbstkosten-Kalkulation.html