Page 37 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
health annually and 20% of the sample units stated none
of these .It shows that majority of the respondents are
monitoring the nancial health of their enterprise on
monthly basis whereas it has also been observed that
20% of the respondents have not been following the
frequency which is commonly used in accounting
practice .In such cases the monitoring of nancial
performance has been done on requirement basis.
Product Pricing

Pricing can be dened as a process of determining the
value that is received by a rm in exchange of its
products or services. It acts as a vital constituent of
generating revenue for an organization. Therefore, the
pricing decisions have a direct impact on the success of a
rm It is necessary to design policies for pricing of its
products or services or ideas just as it is for all the
aspects of business decision-making. A policy
framework should lead to pricing that is well aligned with
the company objectives, costs, competition, and demand
for the product. A set of price policies and strategies will
not only make price setting straightforward but also
make it possibleas a series of prices at various levels of
distribution that are rational and justiable.
The basic considerations any business start-up has to
attend to immediately after it has been established, is the
price which a rm will charge for its principal product.
The primary aim is to cover raw material or other input
costs, generate revenues, cover expenses, attract
consumers, pay employees, etc. The pricing decision is
though fundamental decision, but it considers variety of
factors such as type of product being offered, number of
consumers, number of competitors and their pricing
policies, other factors affecting demand for the product
and the overall goal of the rm.