New founders often calculate prices based on what customers might accept. They overlook the actual cost of delivering the work and running the business.

Start with three figures:

Direct cost

What does it cost to produce or deliver one sale? Include materials, software, contractors, packaging, transaction fees and delivery.

Operating cost

What does the business spend regardless of individual sales? Include salaries, licences, rent, accounting, marketing and subscriptions.

Required margin

What must remain after costs to fund growth, manage risk and compensate the founder?

For service businesses, calculate the real number of hours involved—not only the visible work. Sales calls, communication, revisions, research, administration and project management all consume capacity.

Avoid reducing the price without reducing the scope. If a customer has a smaller budget, create a smaller version of the offer with fewer deliverables or less access.

Early discounts should have a clear reason and end date. For example, a founder’s rate may apply to the first five customers in exchange for feedback and a case study. Permanent underpricing is not a launch strategy.

A price is not sustainable if every new customer creates more pressure without producing enough money to improve the business.