Pricing After Dark

My partners and I started a small service-based business. As we've continued to specialize, we've been able to raise our rates by quite a bit. How do we know when we've become so specialized that any additional narrowing of focus will hurt our pricing power?

I was listening to a business podcast, and the host said that there is a standard ratio between what a consultant can charge and what his client earns as a result of his advice. Unfortunately, I didn't hear him say what this ratio should be. Does six-to-one sound about right to you?

My partner and I have a lot of experience in the automotive industry. A few years ago we started a monthly service that helps scan and organize documents for vehicle service departments. It's going well, but we want to build a bigger business. I thought that the next market we should enter is finance. Buyers in this market have deep pockets and work with a lot of documents. What should we do to maximize our ability to charge high rates in this new market?

I read an article on another website that suggested the best way to figure out my ideal pricing is to keep increasing my rates until I encounter too much resistance. Is calculating my ideal price really this easy?

My company is planning to start using loss leaders. Unfortunately, none of my fellow coworkers has much experience with them. What types of products should we select?

You've repeatedly stated that specializing is one of the keys to maintaining a high degree of pricing power. However, I have two interests. Is it ever OK for a business to specialize in two areas at the same time?

I've been hearing about value-based pricing for a while, so I jumped in and sold my very first value-priced service offering. Unfortunately, the project is taking a lot longer than I had expected. What can I do to get out of this with my sanity (and my bank account) intact?

My company offers a service to people in a small geographic area. A close rival recently raised its prices and seems to be doing well. Does that mean that I should raise my prices too?

A company wants me to write some custom software. It's eager to get started, but there is a lot of uncertainty about its requirements. How can I quote a price when I don't understand the company's needs?

I started working for a new business and noticed that some of our products have much higher margins than others. I've argued that we should get rid of the low margin items and focus on the high margin ones. My bosses disagree. Which of us is right?