Let’s talk about the elephant in the room: Pricing. How you price the work you sell has a direct impact on every aspect of your business. The difference between what you charge and what it costs to make the product and support the staff and building infrastructure is your profit margin, but it takes more than simple math to come to the best decisions about pricing. Product and turnaround time demands can color pricing, but not always in a positive way. If you are struggling with setting prices or trying to decide when it’s time to change prices, here are some starting points.

In this two-part series, we’ll look at five steps for managing pricing. In this first part, we’ll cover the first two, which involve understanding your costs and your current pricing, which will provide a background for the next three steps—which we’ll cover in Part 2.

Costs are more than what you pay for the raw materials that go into your products, and you may have dozens, if not hundreds, of things you buy. Paper and other substrates, inks, toners, solvents, and plates may be at the top of your list, but everything from cleaning products to waste management systems are also part of your cost structure. Begin by categorizing your costs using this as a starting point: