Jen Glantz founded "Bridesmaid for Hire," where couples can hire strangers to show up as bridesmaids.When she was first starting out, she hadn't set a priceand said on live TV that she would work with any budget. That was, in her words, a "major fail."To set a price, she consulted with customers, looked at what wedding planners were charging, figured out what her hidden costs were, considered clients' income levels, and continues to adjust her pricing.Visit Business Insider's homepage for more stories.Within a week of starting my business, I made one of the biggest mistakes an entrepreneur can make. I found myself on live TV getting interviewed about how I took an ad that I posted on Craigslist (that then went viral), and turned it into a business disrupting the $72 billion wedding industry. The business is called Bridesmaid for Hire and yes, strangers hire us to show up at their wedding and be their maid-of-honor for the day. I've been in business for over five years and have serviced close to 200 clients.But there I was, on live TV, getting asked for the first time how much I charged for this service. By that point, I had a website built and packages created, but my pricing was a big question mark. I was asking potential customers what their budget was and how much they would pay for this service, one that didn't exist before my company created it. So on TV, I scratched my head, let out a few "ums" and said that we don't have a standard price and work with any budget.That was a major fail. After the interview, customers reached out asking if they could hire a bridesmaid for $50. It was during that first week in business that I learned I needed to have firm and transparent pricing. The struggle was figuring out how much to charge for a brand new service.Here are the five things I did to figure out my price points and communicate them to my audience.SEE ALSO:3 things to start saving for now to get a head start on 20201. Chat with your customersWhile my initial method of determining pricing was a complete bust, it did help me figure out a good starting point, which is communicating with your customers from the start.I started asking over 20 brides how much they would pay for the first of its kind service I created. I explained how many hours of work they'd get and the details of the package and then asked what they thought was a fair price. The average that they gave (which was upwards of $2,500) was where I decided to start my pricing offerings.Adrian Salamunovic, a start-up advisor and investor, agrees with my method."You simply ask 10-20 potential customers what they would pay for "X" (X= a clear description of that product or service you are selling). You then take whatever answer they give you and enter it into a spreadsheet," said Salamunovic. "Once you have at least 10 answers (more works betterI like to get about 20 or more) you simply use the spreadsheets AVG function to calculate the average amount that people are willing to pay for the item or service in question. This will give you a starting point to determine what the actual market is willing to pay."2. Look at competitorsThe next thing I did was look at people in my industry who were offering the closest possible type of service. For me, that was wedding planners and day-of coordinators. While our services are different, the customer and the structure of the packages are similar. By looking at their pricing structure, I was able to identify industry benchmarks and have more reasoning behind average price points that the customer expects when shopping for vendors for their wedding.David Pawlan, the co-founder of Aloa, a platform for outsourcing software development for startups, said that one of the first steps is looking into competitors and how much they are charging."What are your direct competitors charging' What do services/products go for that are the same concept, but different industry' For example, if you are selling software as a service, understand the price that direct competitors are charging and what other SaaS companies are charging not in your space, to just understand the ecosystem of what people are charging."3. Identify hidden costsA few months into business, when I started to book more weddings than I could count on my fingers and toes, I realized the second biggest mistake I made with my pricing. I didn't account for all of the other business costs that factor into monthly expenses (things like insurance, overhead, marketing, etc.). After determining how much it cost me every month to stay in business, I then had to adjust my pricing to make sure that I could be profitable.Ian Kelly, a VP of operations at a CBD oil company, said it's important to understand all of your hidden costs."A retail sale must cover more than just production costs. For example, what is your customer acquisition cost (CAC)' If you haven't factored in marketing and sales costs, your shelf price will not support your company's profit margin," said Kelly.4. Consider your audienceYou can charge people whatever you want for a product or servicebut that doesn't mean they will buy it. That's why it's important to consider your core customer, and identify how much disposable income they have for your product or serviceand how it fits into their overall budget.For me, I had to identify all the other big purchases my customer would have to make throughout their wedding adventure, and set my price to reflect the piece of their budget they allocated for wedding day help.Abir Syed, a CPA and consultant, said it's important to consider your target demographic and the sorts of resources they have."You want to consider how much spare cash your target demographic has, and how significant a problem your offering addresses," said Syed. "If you're targeting small local businesses and offering something that's a 'nice to have,' you'll have to be at the low end of pricing. If you're targeting more wealthier people with something that's a huge convenience to them, you can charge more. It can help to look at other products/services that, while different, target a problem with a comparable level of severity."5. Know your prices can changeFiguring out how much to charge wasn't something I mastered in a day or a weekit took me a good year and a half. But during that time, I collected data on customers and potential customers, and optimized my pricing. Even five years later, I change packages and pricing every few months based on demand and industry trends.David Pring-Mill, a tech startup consultant, said that pricing strategies are always flexible."It's difficult to figure out what to charge when you start a business that is partly or wholly unprecedented. In fact, price points are an especially sensitive consideration for a wide swath of consumer products at the moment, including quite ordinary things, due to the profound restructuring of global trade relationships," said Pring-Mill. "There's vulnerability when the cost of the goods that you source could rise sharply and suddenly due to politics. How do you account for that volatility in your pricing' There's vulnerability even in planning for a regional expansion or pivot and having that strategic effort upended." Click here to read full news..