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Trade in Services

An Answer Book for Small and Medium-Sized Exporters

image of Trade in Services

Services have played an important role in world trade for centuries. However, in the past 40 years, the focus of the services trade has shifted away from facilitating the trade in goods to trading in the services themselves. Dramatic changes in communications and transportation technologies have made this possible. While exporters of goods and services face similar challenges, services exporters have to deal with unique issues, many related to their intangible nature. This guide addresses these issues and offers practical and relevant advice to small and medium-sized enterprises to help them improve their export performance or enter new markets.

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How do I set a price for my service in a foreign market?

In pricing your service, you need to take into account both what people expect to pay for the service, your break-even point and the profit you would like to make. Calculate your break-even point by determining how much you need to make per service (or per unit of time) in order to cover both your fixed (overhead) costs and the variable costs linked to providing that service. If you are a professional, calculate your daily break-even fee by adding all your costs and dividing the total by the number of days you have available to provide the service. In estimating the number of days available, take into account the number of days you will need for holidays, business development, professional development and administrative work (which is likely to leave you with between 160 and 185 days available in a year).

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