I don’t publish numbers on this site, so you won’t find specific prices or percentages here. What you will find is how to think about pricing — because most small business owners don’t, and it costs them more than almost any other mistake.
Three ways to set prices
Cost-plus
Add up your costs and add a margin. It’s simple and ensures you cover costs — if you’ve counted all of them, including your own time, overhead and the cost of mistakes. Its weakness: it ignores what the customer would pay for the value they receive.
Competitor-based
Price close to what others charge. It feels safe, but it assumes competitors priced correctly, and it pushes you toward competing on price — a race small businesses rarely win.
Value-based
Price based on what the outcome is worth to the customer and how you compare with their alternatives. It requires understanding your customer deeply, but it’s where most of the margin lives.
The practical approach: use costs as your floor, competitors as context, and value as your guide.
Know your real costs first
Many owners underprice because they don’t know their true costs. Work with your bookkeeper or accountant to understand direct costs, overhead, the owner’s time at a fair wage, callbacks and rework, and payment processing and collection costs. If a job doesn’t cover all of those, it’s not profitable — no matter how busy it keeps you.
Packaging and tiers
How you present prices matters as much as the prices themselves.
- Good, better, best. Offer three clear options. Many customers choose the middle; some choose the top. Without options, they can only say yes or no.
- Bundles. Package related services into one higher-value offer.
- Memberships and maintenance plans. Recurring value for recurring revenue. See customer retention strategies.
- Clear scope. What’s included and what isn’t. Fuzzy scope erodes margin.
How to raise prices
- Review prices on a schedule, at least once a year.
- Know why. Better service, higher costs, more demand, more value — be clear.
- Give notice to existing customers.
- Explain briefly and confidently. No long apologies.
- Consider a transition for long-standing customers, if it fits your business.
- Train your team on how to talk about pricing calmly.
- Watch the numbers — close rate and customer feedback — and adjust if needed.
If nobody ever pushes back on your price, it’s probably too low.
Talking about price in sales
- Lead with the customer’s goals and problem before mentioning price.
- Present options, not a single number.
- Anchor to value: what they get, what it prevents, what it makes possible.
- Don’t discount reflexively. If you discount, trade something — scope, timing, payment terms.
See sales scripts for handling price objections.
Pricing rules for your team
If the owner sets every price, the owner is a bottleneck. Write pricing rules — standard prices, ranges, what drives each, what discounts are allowed and who can approve exceptions — so your team can quote confidently. See business bottlenecks.
Common pricing mistakes
- Pricing on fear instead of value.
- Never raising prices.
- Hidden costs you haven’t counted.
- Discounting to close.
- One price, no options.
- Fuzzy scope that leads to free extra work.
Pricing and positioning
Price sends a message. The cheapest option signals “basic.” A premium price, backed by real value and proof, signals “best.” Decide where you want to stand in your market and price consistently with it. See marketing for small business.
Testing price changes safely
You don’t have to change every price at once. Test a new price on new customers for one service first, or offer a new premium tier alongside the existing options and see how many choose it. Track close rate, average sale and customer feedback for a few weeks before rolling it out more widely. Small, measured changes reduce risk and build your team’s confidence in the new pricing.
Pricing and the weekly scoreboard
Add average sale value and close rate to your scoreboard. Watching both together tells you whether price changes are working: if average sale rises and close rate holds, you’ve captured more value without losing customers.
Next steps
Review your real costs and your three most common offers this month, and consider good-better-best packaging. If you’d like help with pricing and packaging, request a strategy call. For all the revenue levers, see how to increase revenue.
Price is one of the few levers that can improve revenue and margin at the same time. Give it the attention it deserves.
When to get outside help
If you’re unsure whether your prices cover your true costs, start with your accountant. If you know your costs but struggle to package, present or defend your prices, a sales and marketing advisor can help you build the offers and the language.
Questions people ask
What is the best pricing strategy for a small business?
Start with your full costs so you know your floor, then price based on the value to the customer and how you compare with alternatives. Use packaging and tiers to give customers choices, and review prices regularly.
How do I raise prices without losing customers?
Raise prices with notice, explain what’s improved or what costs have changed, protect your best customers with a transition where appropriate, train your team on how to talk about it, and focus on delivering clear value.