Key Takeaways
- Start with the value, not your offering costs
- Anchor your price in the market
- Use simple price bands and packages; don’t give a discount
- Test in the real world for validity
- Raise your price with your proof
Most small and mid-size (SME) entrepreneurs underprice. Not because their product isn’t valuable, but because pricing feels like guesswork and emotion.
The good news: Pricing is a skill. You don’t need complex spreadsheets to get them right. You need a simple process and the courage to test.
This is your bi-weekly SME Entrepreneur Newsletter with more in-depth analysis.
Here’s a straightforward way to take control of your prices.
1. Start with the value, not your costs
Costs matter, but they’re not your price.
Your customer is asking one question: “Is this worth it for the outcome I get?”
To answer that, list:
- The main problem you solve
- The concrete outcomes you help them achieve (time saved, revenue gained, risk reduced, confidence, convenience)
- What it would cost them to figure this out alone (time, mistakes, tools, missed opportunities)
When your value is clear, higher prices stop feeling like “charging more” and start feeling like “charging fairly.”
2. Anchor your price in the market
Pricing in a vacuum creates anxiety. Instead:
- Identify 3–5 competitors or alternatives your customers could choose
- Note their pricing and what’s included (access, support, speed, customization)
- Decide where you sit:
- Premium: more access, speed, or depth
- Comparable: similar offer, similar price
- Value: slightly less expensive, but clearly defined
You’re not copying their numbers; you’re choosing your position.
3. Use simple price bands
Most entrepreneurs get stuck between tiny adjustments: “Should it be $197 or $207?”
Ignore that. Think in bands:
- Under $100: impulse-friendly, low-risk
- $100–$500: considered purchase, but accessible
- $500–$2,000: serious commitment, clear ROI required
- $2,000+: premium, transformation-level outcome
Pick the band that matches:
1. The value you deliver
2. The financial reality of your ideal customer
3. The level of access/support you provide
Then choose a clean number in that band and commit to testing it.
4. Package, don’t discount
If you’re always “doing a deal,” your price is unclear.
Instead of cutting the price, adjust the package:
- Fewer features or less access at a lower price
- More support, speed, or customization at a higher price
- Clear “good / better / best” offers
This protects your perceived value while still giving customers options.
5. Test in the real world
You don’t know your perfect price until you see how the market responds.
Choose a timeframe (e.g., the next 10–20 qualified sales conversations) and track:
- How many people say yes
- The most common objections
- Where they hesitate (price, timing, clarity, trust)
If everyone says yes instantly, you’re probably underpriced. If no one converts and they all cite price (not clarity), you may be too high *for your current positioning and proof*.
Adjust 10–20% at a time and test again.
6. Raise your price with your proof
As your proof grows, so should your pricing.
Plan to revisit your pricing every 3–6 months based on:
- New testimonials and case studies
- Improved product quality or content
- More demand than you can easily handle
- Additional access or support you’ve added
You can keep early supporters on legacy rates while raising prices for new customers.
Next step
Pick ONE current offer, move it into a clear price band, and commit to testing that price for your next 10 qualified prospects.
Sajjad Hamid is an SME & Family Business Adviser who supports entrepreneurs in scaling their ventures. In his spare time in Trinidad and Tobago, he cultivates organic tropical fruits and vegetables, practising sustainable farming in his home garden.
He is the author of Build Your Legacy Business: Solopreneur To Family Business Hero. Sajjad is a Fellow of the Family Firm Institute. You can contact him at [email protected] or visit www.entrepreneurtnt.com.
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