How to Price Your Products or Services Properly (Without Undervaluing Yourself)
Pricing your products or services can feel like one of the most uncomfortable parts of running a business.
You sit there staring at a number, wondering:
Is this too high?
Is this too low?
Will people actually pay this?
What if I lose customers?
So instead of making a clear, strategic decision, you do what most small business owners do…
You guess.
Maybe you look at what competitors are charging and land somewhere in the middle. Maybe you choose a number that “feels reasonable”. Or maybe you go lower than you’d like, just to be safe.
And while that might feel like the least risky option, it’s actually one of the biggest reasons businesses struggle to grow.
Because pricing isn’t just about making a sale, it’s about building a business that actually works.
If your pricing is off, everything feels harder. You work more, earn less, and constantly feel like you’re chasing your tail. But when your pricing is right, things start to click. You attract better clients, your workload becomes more manageable, and your business becomes far more sustainable.
So let’s break this down properly and give you a clear, practical approach to pricing your products or services, without the guesswork.
The first thing to understand is that pricing is not just a financial decision. It’s also a positioning decision.
The price you set tells your customers something about your business before you even speak to them.
A lower price often signals affordability and accessibility, but it can also suggest lower value. A higher price can position you as premium, but only if the experience and results match.
Neither approach is right or wrong, but it has to be intentional.
The problem is that many business owners don’t choose a position. They end up somewhere in the middle, without a clear strategy, trying to appeal to everyone, and ultimately attracting the wrong customers.
And this is where pricing starts to create stress.
Because when your pricing doesn’t align with your costs, your value, and your positioning, you feel it every single day in your business.
One of the most common mistakes is relying too heavily on competitor pricing.
It seems like the logical place to start. After all, if everyone else is charging a certain amount, it must be the “right” price… right?
Not necessarily.
You don’t know their financial situation. You don’t know their cost structure. You don’t know their profit margins. And you definitely don’t know whether they’re actually making money.
There are plenty of businesses out there that look successful on the surface but are barely breaking even behind the scenes.
So when you base your pricing on competitors, you’re not creating a strategy – you’re copying someone else’s guess.
And that’s a risky way to run a business.
Instead, your pricing needs to start with your numbers.
At its simplest level, pricing comes down to one core idea: Your price must cover your costs and generate a profit.
Sounds straightforward, but this is where most business owners get it wrong. Because they don’t fully understand their costs.
When people think about costs, they often focus on the obvious ones; materials, stock, or direct expenses tied to delivering a product or service.
But there are so many hidden costs that get overlooked.
Your time is a cost. Admin work is a cost. Emails, phone calls, quoting, planning, travel—it all adds up. Even things like software subscriptions, marketing tools, insurance, and professional services need to be factored in.
If you’re not accounting for all of these, you’re underpricing – whether you realise it or not. And that’s where the frustration begins. You’re busy. You’re making sales. But at the end of the month, there’s not much left over.
Not because your business isn’t working, but because your pricing isn’t supporting it.
Then there’s the topic of profit.
This is where things get a little uncomfortable for many business owners. Because profit can feel… optional. Something extra. Something you’ll get to “eventually”.
But here’s the reality: Profit is not a bonus. It’s a requirement. Profit is what allows you to:
- Pay yourself properly
- Reinvest in your business
- Handle unexpected expenses
- Grow sustainably
Without profit, your business becomes a job and often not a very well-paid one. So instead of hoping there’s money left at the end, you need to build profit into your pricing from the start.
Even if it’s small to begin with, it needs to be intentional.
Now, once you understand your costs and include a profit margin, the next step is thinking about value. Because pricing isn’t just about covering costs – it’s also about what your customer is receiving.
This is where value-based pricing comes into play
Let’s say you’re offering a service that helps a client increase their revenue, save time, or reduce stress. The value of that outcome is often far greater than the time it takes you to deliver it.
If you’re only charging based on time, you’re limiting your earning potential. But if you price based on the result you provide, you open the door to higher, more sustainable pricing.
This doesn’t mean ignoring your costs; it means combining both approaches.
Know your baseline (your costs and required profit), then position your pricing based on the value you deliver.
Of course, even when you understand all of this, there are still a few traps that can quietly pull your pricing down.
One of the biggest is underpricing to win customers
It feels like a smart move to make your offer more attractive, get more sales, and build momentum.
But what often happens is that you attract price-sensitive customers who are always looking for the cheapest option. They’re harder to please, quicker to leave, and less loyal overall. And because your margins are lower, you need more of them just to stay afloat.
That’s not a recipe for a healthy business.
Another common trap is discounting too quickly. A customer hesitates, and before they even ask, you offer a lower price. It might help close the sale in the moment, but it also reduces your perceived value and sets a precedent.
Over time, it trains customers to expect discounts and makes it harder to charge your full price.
Then there’s the habit of avoiding price increases altogether.
Costs go up. Expenses rise. But your prices stay the same.
This slowly erodes your profitability, often without you noticing until things feel tight.
Raising your prices doesn’t have to be dramatic. Even small, regular adjustments can make a big difference over time.
And in most cases, customers expect it, especially if you’re continuing to deliver value.
If the idea of increasing your prices feels uncomfortable, you’re not alone.
But here’s a helpful way to think about it.
When you raise your prices, you’re not just charging more – you’re creating space.
Space to:
- Deliver a better experience
- Reduce stress and burnout
- Focus on quality over quantity
- Build a more sustainable business
And while you might lose a small number of customers, you often gain better ones.
Clients who value what you do, respect your time, and are willing to pay for quality.
Confidence in pricing doesn’t come from mindset alone – it comes from clarity.
When you understand your numbers, your costs, and your value, pricing becomes less emotional and more strategic.
You stop second-guessing yourself. You stop apologising for your prices. And you start making decisions that support the business you actually want to build.
So where should you start?
Keep it simple. Choose one product or service and break it down properly.
Work out what it truly costs you to deliver. Include your time. Add a profit margin. Then compare that to what you’re currently charging.
If there’s a gap, adjust. Not perfectly. Not all at once. Just intentionally. Because small improvements in pricing can have a huge impact over time.
At the end of the day, pricing properly isn’t about being the most expensive or the cheapest.
It’s about building a business that works for you.
A business that pays you properly.
A business that supports your lifestyle.
A business that gives you room to grow.
And that starts with one decision, stopping the guesswork and taking control of your pricing.
Ready to Get Started?
If you’re serious about changing your money…
Not just thinking about it…
Join the membership and let’s build this together!
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