Price a new offer

Pricing a new product or service often comes down to a guess, or copying a competitor. This guide gives you a simple, practical method instead: work out the lowest price that covers your costs, see what similar offers charge, think about what it’s worth to the customer, then choose a price and test it. It’s a way of thinking it through, not financial advice. For tax, VAT or anything you’re unsure about, speak to an accountant or financial adviser.

Before you start

• A clear description of the new offer: what the customer gets, and how much of your time and materials it takes.
• Your rough monthly running costs, such as rent, software, insurance and phone.
• A calculator or spreadsheet.
• The AI tool you normally use, such as ChatGPT, Claude or Gemini.
• About an hour.

Want to do it yourself?

Difficulty

6 out of 10

Estimated completion time

1–2 hours, plus a month of sales feedback

Skills you’ll need: Calculate costs and margins, compare alternatives, and test a price with customers. You need reliable business numbers.

I’ll do it myselfI’d rather get help

How this helps your brand

A checked price supports an offer you can explain and deliver. Keeping it consistent across your website, booking tool, and replies helps customers understand what they will receive and what it will cost.

1. 1

   Step 1: Work out what one sale costs you

   Add up everything it takes to deliver the offer once. Be thorough; forgotten costs are where small businesses lose money.

   • Direct costs: materials, products, delivery, payment processing fees, anything you buy for this sale.
   • Your time: every hour it takes, including travel, admin and follow-up, multiplied by what you need to earn per hour.
   • A share of running costs: your monthly running costs divided by roughly how many sales or jobs you do in a month.

   Tip: If you don’t know what to pay yourself per hour, start with what you’d need to earn in a year, divide by the number of hours you can realistically bill, and treat that as a rough figure to refine with your accountant.

2. 2

   Step 2: Set your floor price

   The total from step 1 is your floor: the lowest you can charge without losing money on each sale. Don’t go below it except as a deliberate, short-term choice, like a pilot.

   Remember to check whether you need to add sales tax or VAT on top. Rules vary by country and by business, so ask your accountant if you’re unsure.

   Illustrated exampleBuild a floor from every cost

   Worked example · four social posts

   Direct costs Images, tools and payment fees

   £15

   Your time 3 hours × £25, including admin

   £75

   Running costs £600 a month ÷ 20 jobs

   £30

   £15 + £75 + £30 = £120

   Cost floor per sale£120

   This covers the estimated costs, including your time.

   At £100, you would be £20 short.

   Illustrative figures before any sales tax or VAT. Check whether tax needs adding.

3. 3

   Step 3: See what similar offers charge

   Look up three to five businesses offering something similar to the same kind of customer. Note what they charge and exactly what’s included. A higher price with more included isn’t the same as a higher price for the same thing.

   This shows you the range customers are used to. You don’t have to match it, but if you’re far above or below, you should know why.

   Tip: If you use an AI tool to search, open the links and check the prices yourself. Prices change, and AI tools can get them wrong.

4. 4

   Step 4: Think about what it’s worth to the customer

   Customers don’t pay for your costs; they pay for the result. Ask yourself what the offer saves them, earns them, or spares them. A service that saves a business owner a day a month may be worth far more than the hours it takes you.

   Write one sentence on the value, in the customer’s words. For example: “I don’t have to think about my social media any more.” That sentence also makes a good headline when you sell it.

5. 5

   Step 5: Choose a price, or three

   Pick a price above your floor, within reach of what similar offers charge, and that you can explain by the value. If you’re torn, a common approach is three options:

   • A basic version for people who want the essentials.
   • A standard version, the one you expect most people to choose.
   • A fuller version with extras, for people who want more.

   Tip: Make sure even the basic version is above your floor price.

   Illustrated exampleGive every package its own cost floor

   Example monthly social content packages

   Estimated cost floor Amount above floor

   1. Basic£165 / month

      4 posts, supplied for you to publish

      £120 cost floor+ £45 above floor

   2. Standard£285 / month

      8 posts, supplied for you to publish

      £195 cost floor+ £90 above floor

   3. Fuller£405 / month

      12 posts, plus scheduling

      £285 cost floor+ £120 above floor

   More included → recalculate the cost. The £120 floor applies only to the basic offer. Estimate each version separately before choosing its price.

   Fictional prices before sales tax or VAT. Use checked comparable offers and customer value to choose your own.

6. 6

   Step 6: Test it and review after a month

   Offer it to a few customers at your chosen price and watch what happens. If everyone says yes instantly, you may be too cheap. If nobody does, ask a couple of them why. It might be the price, or it might be how you explained it.

   After a month or a handful of sales, check your actual costs and time against your estimate in step 1, and adjust. It’s easier to start a little higher and offer an introductory discount than to raise prices later.

   Once you approve a price, list every customer-facing place it appears: the service page, booking tool, menu, ad destination, and saved replies. Update the amount, inclusions, and effective date consistently, then check the actual enquiry or booking route. A sound pricing calculation does not help if the website still presents a different offer.

Help me think through pricing for a new offer in my small business. This isn’t a request for financial advice; please flag anything I should check with an accountant. Explain in plain English.

The offer: [what the customer gets]
Who it’s for: [type of customer]
Time it takes me per sale: [hours, including travel and admin]
Direct costs per sale: [materials, fees, delivery]
What I need to earn per hour: [your figure]
Monthly running costs: [rough total]
Sales or jobs per month: [rough number]
Where I sell: [your town, region or online]

Please:
1. Work out the cost of one sale and my floor price, showing the sums so I can check them.
2. Search for three to five similar offers, with links, prices and what’s included. Say if you can’t find a price rather than guessing.
3. Help me write one sentence on what this is worth to the customer.
4. Suggest a price, or three options (basic, standard, fuller), all above my floor, with a short reason for each.
5. Suggest how to test the price with my first few customers.
6. List anything I should check with an accountant, such as tax or VAT.