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Quick Look Course Summary:Costing and Pricing Training for a Business Venture (3 days)
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Next Public Course Date:
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Length: 3 day(s)
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Price (at your venue): 1 Person R 14,997 EX VAT 3 Person R 11,205 EX VAT 10 Person R 8,120 EX VAT
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Certification Type:Non-Accredited
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Locations & Venues: Off-site or in-house. We train in all major city centres throughout South Africa.
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Costing and Pricing Training for a Business Venture (3 days)
Prices that cover every cost and deliver the profit a venture needs to survive and grow.
Many new ventures fail not for lack of customers but because their prices never covered their costs. Owners guess at overheads, copy a competitor's price or add a mark-up that disappears once VAT, delivery and bad debts are counted. This costing and pricing training shows entrepreneurs, small-business owners and product managers how to work out what a product or service really costs, and how to set a price that leaves a profit.
Day one builds the costing: direct and indirect costs, fixed and variable costs, overheads and a costing sheet for one of the delegate's own products or services. Day two covers pricing: the criteria for a price-setting policy, the main pricing methods, mark-up versus margin, and the internal and external factors that push prices up or down – from competitors and demand to inflation, the exchange rate and VAT. Day three ties costs, revenue and profit together with contribution, break-even and what-if scenarios, and ends with a pricing plan for each delegate's venture.
Delegates need basic numeracy only. Every calculation is taught step by step with a calculator and a simple spreadsheet.
Why this course
For your organisation
- Prices that cover full costs, not just the obvious ones
- A written pricing policy that sales staff can apply consistently
- Early warning when a product or contract will not make money
- Better-founded go or no-go decisions on new ventures and products
For your delegates
- A costing sheet for your own product or service
- Confidence to explain the difference between mark-up and margin
- A break-even calculation you can update in minutes
- A pricing plan you can take straight back to the business
What delegates will be able to do
- Classify costs as direct or indirect, fixed or variable
- Calculate the full cost of a product or service, including a fair share of overheads
- Explain the criteria for a price-setting policy for a new venture
- Compare cost-plus, competitor-based and value-based pricing and choose the right approach
- Analyse the internal and external factors that affect pricing decisions
- Convert correctly between mark-up, gross margin and VAT-inclusive prices
- Calculate contribution, the break-even point and the margin of safety
- Show how changes in cost, price and volume affect profit
Who should attend
Entrepreneurs and owners of small and growing businesses, people preparing to launch a new venture, product and service managers, sales staff who quote prices, and enterprise and supplier development (ESD) beneficiaries who need to price their goods and services for corporate customers.
Course outline
Day 1 – Understanding costs
Why ventures fail on price
- The link between costing, pricing and survival
- Common pricing mistakes in small businesses
- Profit as the cost of staying in business
- Case discussion: a venture that sold more and lost more
Types of cost
- Direct materials, direct labour and direct expenses
- Indirect costs and overheads
- Fixed, variable and semi-variable costs
- Start-up costs versus running costs
Costing a product or service
- Building a costing sheet step by step
- Allocating overheads fairly
- Costing services by the hour
- Hidden costs: wastage, delivery, bank charges and bad debts
Workshop: your own costing
- Gathering cost information for your product or service
- Completing the costing sheet
- Peer review of your assumptions
Day 2 – Setting the price
Price-setting policy
- What a pricing policy is and why a new venture needs one
- Criteria: costs, profit target, market position and customer value
- Rules for discounts, payment terms and price reviews
- Putting the policy in writing
Pricing methods
- Cost-plus and mark-up pricing
- Competitor-based pricing
- Value-based pricing
- Penetration, skimming and bundle pricing
- Pricing for tenders and corporate supply contracts
Mark-up, margin and VAT
- Mark-up versus gross margin
- Converting between the two without errors
- VAT-inclusive and VAT-exclusive prices for VAT vendors
- Practice calculations
Factors that affect pricing decisions
- Internal factors: costs, capacity, objectives and product life cycle
- External factors: competition, demand and customer buying power
- Economic factors: inflation, interest rates and the exchange rate
- Price display under the Consumer Protection Act and fair competition, as general guidance and not legal advice
Day 3 – Costs, revenue and profit
Contribution and break-even
- Contribution per unit and the contribution margin
- Break-even point in units and in rand
- Margin of safety
- Reading a break-even chart
Profit planning
- Target profit and the sales volume needed to reach it
- Effect of a price change on volume and profit
- Effect of cost increases on margin
- What-if scenarios in a spreadsheet
Testing the venture
- A first-year sales forecast
- Will the expected profit justify the launch?
- Cash flow effects of payment terms and stock levels
- Reviewing prices as costs change
Pricing plan and close
- Completing a pricing plan for your venture
- Presenting the plan for feedback
- Action plan and evaluation
How it is delivered
Three days, 08:30-16:00. In person at your offices anywhere in South Africa, at a BOTI venue, or live online. One delegate or a group of up to 20. Workbook, costing sheet and break-even templates included; delegates should bring a calculator, and a laptop with a spreadsheet program if they have one. We deliver it at your offices in Johannesburg, Pretoria, Durban, Cape Town and anywhere else in South Africa, at a BOTI venue in Johannesburg, or live online for teams in different places.
What our clients say
“All training sessions were well-coordinated, professionally delivered, and aligned with our scheduling requirements. We were particularly impressed by the high standard of facilitation and the depth of expertise demonstrated throughout the programmes.”
“All training sessions were well-coordinated, professionally delivered, and aligned with our scheduling requirements. We value the partnership and look forward to continued collaboration with Business Optimization Training Institute in the future.”
“All training programmes were delivered in a highly professional manner, with effective coordination and strict adherence to our scheduling requirements. The facilitators demonstrated a commendable level of expertise, and the quality of delivery consistently met our expectations.”
Frequently asked questions
Can you run this course at our offices?
Yes. Most groups are trained at the client's premises anywhere in South Africa; we can also host it at a BOTI venue or deliver it live online.
Do delegates need a finance background?
No. Basic numeracy is enough. The calculations are taught step by step, and delegates practise on their own products or services.
Can it be tailored to our sector or ESD programme?
Yes. For enterprise and supplier development groups we use the delegates' own products, services and price lists, and can spend more time on pricing for corporate tenders.
Is it accredited?
No – it is a non-accredited short course and delegates receive a BOTI certificate of attendance.
How many people can attend?
From one delegate to groups of about 20. The price per delegate drops as the group grows – see the price table, or ask us for a quote.
Can you run this course in Johannesburg, Cape Town or Durban?
Yes. We train on site at your offices in Johannesburg, Pretoria, Durban, Cape Town and across South Africa, at a BOTI venue in Johannesburg, or live online so a team spread over several offices can attend together.