Cumulative Project: Develop a Pricing Structure Required Materials Word processing software Spreadsheet software The ability to choose a pricing policy and apply it to your product or service is an important skill for all entrepreneurs. This activity will provide practice doing basic pricing calculations, using your product costs and your markup. Step 1: Identify Pricing Risk Factors . Determine risks associated with your pricing objectives. Look at how the price is affected by: supply and demand 0 0 the competition economic conditions government regulations How does the target market itself affect your pricing? Open a document and title it Pricing Create a heading on the document and label it Risk Factors. Write four to five sentences that describe your product in relation to each of the specific risk factors. Step 2: Determine Your Pricing Objective(s) Determine your pricing objective. Note that you can choose to maximize sales, profits, market share, or simply to cover your costs and earn a modest profit Create a second heading on the document and label it Pricing Objectives. Write your pricing objective in one or two sentences. Note that you may decide to optimize on more than one objective at the same time. Step 3: List the Pricing Factors and Calculate Open a spreadsheet and title it Pricing Worksheet. Create five columns with the following headings: Product/Service Cost of Goods Cost of Sales Markup Product Price Discount