There are different ways to organize and deal with pricing in your home business and one of those ways is to consider offering fees or prices on a “sliding-scale” basis. This means that you set the price range, and depending on the individual’s resources and ability to pay, they may pay the low-end price or, potentially, the high-end one.
There seem to be some businesses and industries that are better-suited for sliding-scale fees than others. I have noticed that some therapists and counselors use this type of payment structure and I recently signed up for dance classes with a dance school that offered the classes on a sliding-scale price basis—it is up to me to negotiate the price that works for my budget. This does require some negotiation between the business and the client or customer. If you have a set price or fee with no variation, then people either pay or they don’t. With a sliding-scale fee, each relationship requires a negotiation to come to the appropriate amount—or you are putting the client or customer on the honor system and hoping that they pay a reasonable amount.
If you choose to use this type of payment system, you will need to do a little research and homework to determine what is the minimum amount that you need to make your time, services, or products valuable. That way, even if someone pays at the lowest end of the scale, you will still recoup your expenses and pay for your time. You can then hope that those who pay at the higher end will help off-set some of the difference. I do not think that you should under-cut yourself on the low end, however, hoping that you will have enough higher-end paying customers to bring the average up.
If you are considering this type of payment structure, it can also be helpful to talk to other businesses that use it to get advice, suggestions, and ideas for how to make it profitable and user-friendly.
Also: Can You Justify a High Price?
Are You Giving Away Too Much for Free?