For many small business owners, pricing can feel like a guessing game. What will customers pay? What are competitors charging? Am I too expensive? Am I not charging enough?
That uncertainty is certainly natural, says Roslyn Rice, a business consultant with the Florida SBDC at FIU who has deep expertise in omni channel sales strategies, strategic planning and visual merchandising. “Pricing is really an emotional decision,” she told business owners in her presentation on Pricing for Profit at the recent 2026 Small Business Success Summit in Charlotte Harbor produced by the Florida SBDC Network. How owners think about money, and what they experienced growing up, can influence whether they underprice, overspend, avoid their financials or confidently invest in the business.
But Rice’s central message is simple: Don’t price to increase revenue. Price for profit. Revenue and profit are not the same, and profit is what allows owners to pay themselves, reward their teams and reinvest in their businesses, she says.
Here are some of her tips:
Start with your real costs.
Rice, with 30 years of experience in the retail industry and in leadership, recommends that owners understand all the costs involved in delivering a product or service. That means fixed expenses, such as insurance and equipment, as well as variable costs that rise with sales. Service businesses also need to account for labor, including the owner’s own time, plus expenses such as subcontractors, gas, materials, vehicles, insurance, processing fees and commissions.
For service providers, Rice offers a particularly important reminder: “One hour is not one hour.” A one-hour speaking engagement, for example, can require preparation, meetings, curriculum development and follow-up. Those hours and costs need to be reflected in the price.
Don’t ignore the market, or your value.
Knowing your costs is essential, but it is only part of the equation. Rice recommends examining direct and indirect competitors, consumer demand, psychological pricing and brand positioning. Even businesses with highly specialized offerings have competition.
Most importantly, “people are not buying your products or services. What they’re buying are your outcomes,” Rice explains. “I don’t want a vacuum cleaner; I want clean floors. I don’t want just a website designer; I want more traffic and conversions.”
That shift can open the door to value-based pricing. That means charging according to the outcome, experience and transformation a business provides. Other strategies Rice discussed include cost-plus pricing (as it sounds, it’s simple but often incomplete), competitive pricing (useful in saturated markets but it ignores your uniqueness) , penetration pricing (low entry point to disrupt a market, then increase prices) and tiered pricing (offering “good, better, best” packages so customers can choose their level of support and user experience desired). Tiered pricing, she noted, can be especially powerful for service businesses.)
Stop pricing from your own wallet.
Rice cautions owners against several common traps: pricing based on assumptions, pricing according to what they personally think is affordable, blindly matching competitors or sacrificing profit because they want to be generous. “Generosity without profit isn’t generosity. It is being depleted, being exhausted, it’s that fast track road to burnout.”
Instead, she urges owners to use real business data. Review the last seven to 10 customers. What did they buy? What problems were they trying to solve? How did they find the business? What patterns emerge?
That information can help owners identify profitable packages, pricing tiers, recurring services and subscription opportunities. “Find the pattern,” Rice says. “There’s a pattern in your own data that you’ve overlooked on why people are buying from you.”
To turn pricing into actual cash flow, Rice recommends considering three practical operational changes:
- Offer Tiered Options: Adopt a “Do-It-Yourself, Do-It-With-You, Do-It-For-You” model — or that good, better, best model. Giving customers choices lets them customize their experience and self-select into higher price points.
- Tighten Payment Terms: Protect your cash flow by requiring upfront deposits or progress billing. Be cautious with auto-populated net terms on invoicing software, and enforce late fees consistently.
- Avoid Wallet-Pricing: Never set rates based on what you personally would pay or assume a client can afford. Base decisions on real market data and consumer demand rather than personal assumptions.
Price with the business you want in mind
Ultimately, Rice says pricing should support the owner’s larger goals. “Do not charge based on what the client is asking, but based on the goals of the business,” she advises. Otherwise, scope creep can consume time and erode margins.
For small business owners, that may be the most useful pricing test of all: Does this price — and the offer behind it — help build the profitable, sustainable business you actually want?
STAY TUNED FOR MORE: Watch Growbiz for more tips we gleaned from the Small Business Success Summit.