Pricing Strategies: How to Stop Undervaluing Your Services
Pricing is one of the hardest parts of running a small business. Many business owners set their prices based on what competitors charge, what feels “fair,” or what they think clients will pay, not what the service is actually worth or what the business needs to remain profitable.
The result?
Chronic undercharging, low margins, burnout, and constant pressure to take on more work just to make ends meet.
As an accountant, I see this more often than almost any other financial issue. The good news is that undervaluing your services is fixable. Here’s how to set prices with confidence and build a healthier, more profitable business.
1. Understand the True Cost of Delivering Your Service
Before you can charge the right price, you must get clear on the real cost of providing your service. This isn’t just about materials or labour, it includes the hidden costs too.
Your pricing should cover:
Direct labour
Materials or supplies
Software & tools
Overheads (rent, utilities, admin time, marketing, insurance)
Taxes
Your desired profit margin
Most underpricing happens because the business only considers the first two or three items.
Tip:
Work out the total cost per hour to run your business. You may be shocked how much you’ve been absorbing out of your own pocket.
2. Stop Pricing Emotionally, Start Pricing Strategically
It’s common for business owners to price based on fear:
“Will they think this is too expensive?”
“My competitors charge less.”
“I don’t feel experienced enough yet.”
But pricing isn’t about emotions, it’s about value and sustainability.
Instead, ask yourself:
What transformation or problem do I solve for my clients?
What is the outcome worth to them?
What would it cost them not to solve this problem?
When you shift from “time spent” to “value delivered,” your confidence increases, and so does your pricing.
3. Benchmark the Market (But Don’t Copy It)
It’s smart to know what others charge, but dangerous to copy their pricing.
Your competitors may be:
Underpricing themselves
Running their business inefficiently
Targeting a different clientele
Offering a different level of quality
Operating with lower overhead
Use competitor research as a reference point, not your pricing bible.
4. Decide Whether You Want to Compete on Price or Value
There are only two ways to compete in business:
Be the cheapest.
Or be worth paying more for.
Small businesses rarely win the “cheapest” game, big companies can always undercut you.
Competing on value means:
Better service
Better communication
Better expertise
Better experience
Better results
Value-based businesses attract loyal clients who appreciate quality, and pay for it.
5. Build a Clear Pricing Structure
Confusing or inconsistent pricing leads to undercharging and awkward conversations.
Consider setting up:
A standard rate card
Tiered service packages
Minimum project fees
Late-payment or rush-job fees
A structured discount policy (or no discounts at all)
Clear structure = confident pricing.
6. Review Your Prices Annually
Costs rise. Experience increases. Demand grows.
Your prices should evolve too.
Many small businesses go years without increasing prices, which means profit margins shrink slowly until the business becomes stressful and unsustainable.
A simple rule:
Review your pricing at least once every 12 months.
Even a modest increase can have a significant impact on profitability.
7. Communicate Your Value, Not Just Your Price
Clients don’t automatically understand what goes into your work. When quoting, don’t just list the price, explain the value behind it.
Examples:
“This includes full compliance, risk review, and support if you’re audited.”
“You’ll get priority turnaround and direct access to me when needed.”
“Your website will be optimised for speed, conversions, and mobile.”
When clients understand the value, price resistance drops.
8. Don’t Apologise for Charging Properly
Many business owners justify, lower, or apologise for their pricing out of habit.
Stop.
Confident businesses attract confident clients.
Try statements like:
“This is the investment for that service.”
“I’m comfortable with the value of this price.”
“Here’s what’s included to support that cost.”
Your pricing should reflect your professionalism, not your insecurities.
Final Thoughts
Undervaluing your services doesn’t just hurt your bank account , it drains your time, energy, and ability to grow.
By understanding your true costs, pricing based on value, and communicating clearly, you can build a business that:
✔ pays you properly
✔ attracts better clients
✔ supports long-term growth
✔ reduces stress around money
If you'd like help reviewing your pricing, calculating your profit margins, or understanding what your business needs to charge to stay sustainable, I’m here to help.