Why Your Pricing Strategy Might Be Hurting Your Business - And what to do about it.

If you think pricing is just about covering your costs or beating the competition, think again. Price sends a message—to your customers, your competitors, and your bank account.

For many new business owners, pricing feels like guesswork or something to “figure out later.” But getting it wrong can kill your profits fast.

Here’s how to get it right.

1. Know Your Numbers

Before you set your price, understand your costs. That means:

• Break-even point – How many sales you need just to stop losing money.

• Markup vs. Gross Profit – Markup is how much you add; gross profit is how much you actually keep.

• Net Profit – What’s left after all expenses, including your own wage.

If your business can’t pay you a fair salary and still make a profit, it’s not a business—it’s a hobby.

2. Avoid the Race to the Bottom

Trying to be the cheapest? Think again. Competing on price alone is a fast track to burnout. Big retailers can afford it. You probably can’t.

Instead, compete on value:

• Faster service

• Personal attention

• Better quality

• Local expertise

Don't teach your customers to expect discounts—teach them why you're worth paying for.

3. Be Strategic About Discounting

Discounts can work, but only when used smartly:

• Know your lowest acceptable price in advance.

• Add value instead of cutting price—like free delivery or a bonus.

• Avoid permanent discounts. They eat your profit and damage your brand.

4. Make Sure Your Price Matches Your Brand

If you’re marketing yourself as high-quality or premium, your price should reflect that. Low prices and luxury promises don’t mix. Be consistent.

5. Play “What If?” Before You Commit

Test your pricing:

• What if your costs go up?

• What if you add a bonus?

• What if sales slow down?

Think it through before you act. Panic-pricing is a trap.

Bottom Line

Price is more than a number—it’s a strategy.Get your numbers right. Stick to your value. And don’t let fear drive your decisions. Pricing done well protects your profit and positions your business to grow.