FARMINGTON — A workshop to help small- or home-based businesses set prices for their products will be offered for free by the University of Maine Cooperative Extension.

The session will take place from 6 to 9 p.m. Tuesday, Jan. 18, at the Farmington office, 138 Pleasant St. Child care is available.

While each business is different, there are factors that each business needs to consider in establishing prices, said Marc Edwards, Cooperative Extension tourism economic development professional.

For the new business or ones already established, “this could be an eye-opening experience,” he said. There are key elements that need to be factored in to setting a price, he added.

Developing a pricing strategy includes setting goals on whether this will be a wage-earning business or one that provides extra money from products, he said. Business owners also need to know who they are targeting and incorporate labor and overhead expenses, he said.

Part of that includes determining whether the business owner plans to pay himself and taking steps to keep accurate records of the work and materials that go into each product, he added.

That was the basis for establishing prices for baked goods, wreaths and soaps created by Therese Pinette and Elvis Phair at Law Mountain Wreaths N’ Bakery on the Pond Road in Wilton.

Started as a home business, the owners have moved to the bakery. One of their biggest struggles was pricing, Pinette said Friday.

“We looked at what it cost to produce and market but still wanted to make things affordable,” she said.

With a background in the retail grocery business and as a business officer manager, Pinette said she had a good idea of how to start, taking account of what goes into the product and what type of market they were covering, but pricing remains a challenge.

Ingredients such as flour, sugar, dairy products continue to rise as does heating oil, she said. The higher costs may force them to raise their prices.

“It’s a balance between selling price, sales volume and expenses,” Edwards said. “Generally most tend to underprice their product and not figure in labor and costs for themselves.”

A study completed in Orono on shopping at farmers markets compared to large grocery stores showed people were willing to pay a higher price for produce from local farms, Edwards said.

The businesses also need to look at the competition and discover how to make their products stand out to get a premium price.

The Pricing Your Products for Profit workshop is intended for not only new business owners but also the person already in business, he said. They may adjust their prices up or down but considering these elements will enable them to better set their prices to meet their business goals.

Key presenter for the workshop is James C. McConnon, economics and small business specialist for the Cooperative Extension.

Registration is requested. Contact Cooperative Extension’s Franklin County Office at 778-4650 to register or for more information.

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