Entrepreneurship · Week 12 of 18

Startup Finance I:
Cost Structure & Pricing

You can't price something if you don't know what it costs.

NKUHT · International Tourism Management Program · 2-hour session

Today's plan

One session, two halves

0:00–0:10

Welcome back. Recap: your GTM plan.

0:10–0:35

Fixed costs vs. variable costs.

0:35–1:00

Cost-plus pricing vs. value-based pricing.

1:00–1:45

Activity: calculate COGS and set your unit price.

1:45–2:00

Share, debrief, quick learning check.

Quick recap

Last week → This week

WEEK 11

You outlined a 4-week launch campaign to reach your first customers.

WEEK 12

Now you figure out the real numbers behind your idea, starting with cost.

Cost basics

Fixed vs. variable

FIXED COSTS

Don't change with how much you sell — e.g., a booth fee, equipment.

VARIABLE COSTS

Change with every unit sold — e.g., ingredients, packaging, per-item fees.

Pricing approaches

Two ways to set a price

COST-PLUS

Cost per unit + a target margin. Simple, but ignores what customers will actually pay.

VALUE-BASED

Based on what the persona is willing to pay for the value you create — from Week 4.

Hour 2 · Activity

Calculate Your COGS & Set a Price

Goal: know your true cost per unit, and defend your price with a reason.

  1. 01 List every variable cost that goes into one unit of your product/service.
  2. 02 Add them up: this is your Cost of Goods Sold (COGS) per unit.
  3. 03 Decide: cost-plus, value-based, or a blend? Justify your choice.
  4. 04 Set a price, and check it against what your Week 4 persona would realistically pay.
Activity timer

Work time

45:00

Tip: give a warning before time is up.

Debrief · Ask the whole class

Talk about it

1. What surprised you about your true cost per unit?

2. Did you use cost-plus or value-based pricing? Why?

3. Would your Week 4 persona actually pay this price? How do you know?

Quick learning check

Before we go — 3 short questions

1. A fixed cost is one that...

2. Value-based pricing is based on...

3. COGS stands for...

See you next week

Week 13 — Startup Finance II: Revenue Projections & Break-Even Analysis

Next week: use today's pricing to project revenue and find your break-even point.

Bring: your unit price and COGS calculation.