purpose:

To be sure that the team puts the best solution out at the best price.

How to:

Choose:

• Cost – how much money it takes to make and sell your solution

  • Materials & Parts

  • Labor

  • Overhead

  • Development

  • Marketing

• Price – how much you can/could sell your solution for

Calculate:

• Price – Cost = Profit (on a simple level)

Tips:

• Think about scale! What gets cheaper as you make/order more? What materials could you change to reduce cost?

• What components could you outsource to make things cheaper?

• How does your solution performance/capabilities/features align with your cost and price?

• Should you make different versions at different prices? (a tiered approach)