One of the most common problems we see with small businesses, especially service-based businesses, is undercharging. If your prices haven’t changed in years, if your profit margins are tight, or if you’re working nonstop without seeing a return, it might be time for a pricing check-up.

Here’s how to get started:

1. Know Your True Costs

Are you factoring in not just direct costs (materials, labor), but also your overhead, admin time, insurance, software, and marketing? If you’re not capturing these in your pricing model, you may be working at a loss.

2. Check Your Margins

Look at your profit margin per product or service. After costs, are you hitting your target margin (usually 30–50%+ depending on your industry)? If not, a price increase might be in order.

3. Review Competitor Pricing

Are you priced similarly to others in your space? If you’re way below market, customers might assume your quality is, too. Don’t race to the bottom, charge based on value, not volume.

4. Consider a Tiered Model

Offering multiple pricing tiers or packages gives customers options and can help you increase average spend without scaring off budget-conscious buyers.

5. Don’t Forget Your Time

Your time is valuable. If your pricing doesn’t reflect your expertise, experience, and the results you deliver, it’s time to reassess.

Need help evaluating your profitability or creating a smart pricing strategy? We help business owners take a hard look at their numbers and make changes that actually stick.