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Join for freePosted: Tue 22nd Sep 2026
Are you charging enough to make your business truly profitable?
Learn how costs, demand and growth plans should influence your pricing strategy.
Understand how to price your products or services confidently, protect your margins and avoid common mistakes that erode profit.
Know your costs before you set your prices – guessing your prices means guessing your profits
Price for the value you deliver, not just what your competitors charge or what feels comfortable
Protect your profit by reviewing your prices and margins regularly – more sales don't always mean more profit
Tara Askham is the founder of She Starts Smart and TKA Finance Training, and a subject matter expert to global accountancy awarding bodies.
She sits on the Xero Financial Confidence Taskforce, the government-backed Maple Review Steering Board and the NatWest Social and Community Capital Charity Funding Panel.
Tara is on a mission to help business owners move from fearing their numbers to owning them.
Access a growing collection of expert-led webinars covering marketing, sales, finance, growth and more – ready whenever you are.
Lightly edited for clarity.
Beth: Hello, everyone, and welcome to today's Powering Local Businesses Lunch and Learn. I'm Beth, community manager at Enterprise Nation.
Powering Local Businesses is brought to you by EDF Small Business and Enterprise Nation, and it's designed to help small businesses grow more sustainably, however you sell and wherever you're based.
Through the hub, you can access energy-saving guidance, expert workshops, and a range of free business support resources. We'll be dropping links in the chat throughout, so please do keep an eye out.
Today, we're focusing on something that affects every single business but often gets left to gut feeling: pricing. Are you charging enough? Are your margins actually protected?
Do you know what's quietly eating into your profit? This session will help you answer all of that with confidence.
We're joined today by Tara Askham, founder of She Starts Smart and TKA Finance Training, and a subject matter expert to global accountancy awarding bodies. She's on a mission to help business owners move from fearing their numbers to owning them.
Today, she's going to help you do exactly that with your pricing. In the session, Tara will walk us through how to price with confidence, how to protect your margins, and how to avoid the common mistakes that erode profit even when sales are growing.
As always, please post any questions you have for Tara in the Q&A box as we go along. The session is being recorded, so you'll get that later today, and we'll also send some further resources afterwards.
Thanks very much for joining, and over to you, Tara.
Tara Askham: Lovely. Thank you very much. Great to see everyone here, and thank you for joining.
My name is Tara Askham, and thank you for that introduction, which is great. Let's delve straight in, because we don't have too much time and we want to make sure you're getting the most from this Lunch and Learn session.
So, key things we're looking at over this session: knowing your costs before you set your prices, because we don't want to be guessing. We're going to look at some strategies to help us with that.
We want to be able to price for the value we deliver, not just what's in line with our competitors or what we feel comfortable with. And the last part we want to look at is protecting our profits, because we need to review our prices and margins regularly, and also not fall into the trap of discounting.
Often people think that the more sales you're getting, the more profit – and that isn't always the case.
So how do you set your prices? Do you base it on competitors, or on what you feel comfortable with, or are you doing some full calculations?
Feel free to pop this into the chat box – does anyone want to share how they're approaching setting their prices currently?
Thanks, Gareth – so Gareth says he looks at his competitors. Ah, so does one.
And I suppose here's a question for you: how do we know that what our competitors are charging is realistic? Do we know whether they're actually covering their costs?
Leo's popped in there as well – cost plus value. And Sherita's put in there – cost of goods and expenses.
It's really difficult, isn't it, to set these prices? We do have to look at a number of different things, which is why we want to focus on some of these aspects today.
Jess has said she has a spreadsheet and uses – hang on – the percentage markup, and sometimes has a loss leader to attract customers.
That's a really good point, Jess. Sometimes businesses will deliberately sell a product or a service at a loss, but they use that to bring customers in, because then they've experienced your products or services and are more likely to purchase from you.
That's a bit of a marketing tactic that's available if we wanted to use it.
So Dan's got a mixture of competitors and what feels comfortable for service-based businesses. There's a mixture there – thank you for sharing those with us.
One of the key things we want to think about from this is that we could be looking at competitors, but we don't know whether they're covering their costs. They could be taking the approach of a loss leader, like one of the examples mentioned.
And if we don't know the true cost of a sale, we don't know whether the price is sustainable, because we're all in business. Even if we run a not-for-profit organisation, we've still got to cover our costs.
So we've got to be very clear: are we covering all of our appropriate costs? Let's delve into this a little bit deeper.
We've got direct costs. You may also hear these referred to as cost of sales. These are any of the costs that directly relate to the products or services we're selling.
That might include materials – if we're making products, there'll be materials associated with it. There's the stock we're purchasing, either to help us make a product or to resell.
So it's about what's relevant to your business, but also thinking about what else relates directly to the sales you're generating. Classic examples would be packaging, delivery costs, and any payment fees, like Stripe transactions.
And the thing with these direct costs is that they're variable – they change in relation to the number of sales we're making. So we really do need to get to grips with these costs and have them listed on a spreadsheet, or coded a little differently in your accounting software.
If you're using any of the main software – FreeAgent, Xero, Sage, QuickBooks – they have what's called a cost of sales code where you can code them to this.
But then the one we often miss – and I've been guilty of this – is our time.
Let's say I'm asked to deliver a session for somebody, but when I'm costing that out, I need to think about how long it's going to take me to put the slides together. It's a lot less for this shorter session than it would be for a five-day course, for example.
But I think when we're starting out, and we want to be competitive and get those customers – I was probably working on less than minimum wage at one point, when I took into consideration how much time I spent preparing compared to what I was charging the client for the delivery.
So I do want you to bear that in mind as well – the emails and the meetings, the preparation of whatever it is you've got to get ready.
Let's say you've got to do some pre-research, or you've got to have some meetings – it could be internal team meetings, or external ones with the client, and sending emails. All of that needs to be taken into consideration.
Also, if you're travelling – it could be that you're going to have to travel the day before, for example, and that means you're not earning during that time. So that needs to be taken into consideration.
And also, what happens if the client asks for amendments, or customers who you're selling products to say there's an issue with it? We need to think about incorporating that within there as well.
And then we also need to think about the general overheads of the business. These tend to be fixed – they stay the same irrespective of how many sales we're making.
A classic example is during COVID, when most businesses had to stop trading, but we still had to pay our business overheads. We still had to pay the insurance, so we had a business to come back to – software costs, maybe some marketing costs, accountancy and equipment, and things like that.
So when we put this into context, what we think might be a two-hour job can easily eat into four hours of our time. Has anybody found that before, when they're costing out jobs, that you need to think about other things incorporated within your time?
Yeah, that's massive, Jess, isn't it – the design element. We want to do our best for our clients, but we've got to manage that succinctly.
What we want to make sure is that we're covering those direct costs on the left – the costs associated with what we're selling to our customers. But we've also got to make sure we're covering our time and the overhead, so that we know that when we're selling goods and services in our business, we can comfortably pay all of our bills on a monthly basis.
Yeah, and design can be tricky. It's about setting boundaries – how many times is somebody allowed to have amendments to something?
Yeah, Dawn, I can see that would take so much time. So yeah, we're all in this sort of trap a little bit, aren't we, with this.
So there are some things we can think about in terms of whether we then have the capacity to increase our prices. Because a lot of you said that you charge in line with your competitors, which is absolutely fine.
But it still poses the question: are we covering our costs sufficiently? So when we think about covering our costs, we also want to think about that value perception – what is the result the customer is going to receive?
If we think about this from a different perspective, have we promised the customer this great big service, all singing all dancing, where they're going to get the VIP treatment? Or are they just buying something very cheap, one-off, with no other commitment to them?
The way I always think about this is booking a flight – you've got Ryanair, who now charge extra for even reserving a seat, and all of those things. But you know what you're getting – it's the cheaper end, and you're going to get to where you want to go, cheaper, essentially.
If you're booking Emirates or Virgin, then you're booking that because you're travelling further, but you're going to get a more luxurious experience, and the cost is reflected in that.
So customers of Emirates and Virgin are going to be expecting much more value because they've paid a lot more, compared to Ryanair, where you've paid those cheaper prices. You've added all the different bits on according to what you need, and you don't really expect anything else.
But also, if you're thinking about an accountant – what are you offering? The customer wants accurate, up-to-date records. They want to make sure it's been filed with HMRC on time, and that they're not missing those deadlines.
And the value they're getting from that is it's saving the business owner's time and the worry of it. So again, really honing in and thinking about what is the value that you offer.
Then that takes us into what could delay or inaction cost. So if we're thinking about an example, maybe a web designer.
Let's say you're a sole trader, and maybe you've given quite a low-value quote, not taking into consideration all the changes or amends, and that's impacted your ability to deliver on time and to respond to other potential enquiries.
Think about that impact on the cost and the value of the business. How much time, money or risk does your work save as well?
This can also be where we think about whether we need to bring other people in to support with different elements of the business. And if we do, we always need to be reassessing our prices, because then we've got an additional cost to consider when we're setting our prices.
Now, as well as making sure we're covering our costs, there are different methods. It could be that we decide to add on a certain margin we want to achieve, or a certain amount of profit we want to gain after we've covered our costs.
And we could do that with a competitor analysis to see what they're charging – we could see where we fit in line with our competitors, or with Ryanair or Emirates, or if we're in the middle.
It could be that we look at offering different packages as well, according to what our customers need. So we could offer packages to businesses that are on a budget but don't get as much support, and a more expensive service where they get, let's say, five or 10 hours' worth of support, but that's fully costed into your quotes as well.
So it's about thinking that customers are not only paying for the time you spend with them. Let's say they're purchasing two hours of you to do coaching, or whatever that might be – they're also investing in the outcome, your expertise, convenience and reassurance.
So that's the bigger-picture thinking. There's that piece around thinking about what they expect from you, what you're delivering, and how you compare to your competitors.
How many of you offer discounts? Just pop in the chat if you offer discounts.
Often people go straight to offering discounts when they're trying to win work, and we need to think really carefully about this. So often there's a common one of offering it to repeat customers, or if people are ordering in bulk, then you decide to offer a discount.
There's no set right or wrong answer here, but if you're offering discounts as part of your strategy to build customer relationships and bring more customers in, we need to be aware – with the example I've got on the screen here – let's say your normal selling price is £100 for either a service or a product.
The direct cost associated with that product or service is £60, and so the gross profit – when people talk about gross profit, it's the profit we've made just from selling that item and covering the direct costs, before we think about any overheads. So in this example, we've made £40 per sale.
Now, if we're quick to discount that at a 20% discount, what we're then doing is reducing the selling price by 20%, so it's down to £80. The direct costs are still the same, so there's still £60, but our gross profit per sale is only £20.
So actually now we're in a position where we need to sell twice as many items to achieve that same gross profit. Because in our business, we want the gross profit to be as high as possible.
And when we talk about that, it's about pitching the selling price right in line with competitors, but also managing those costs appropriately – always reviewing them to make sure we're not paying too much, or if we're paying for marketing, that we're getting an appropriate return on investment.
So I invite you to think carefully, when you're offering discounts, about whether the outcome is that you're going to be able to cover your costs efficiently at the end of each month.
So when we think about pricing, and when it needs a bit more attention – if we're extremely busy working in our businesses but we're still having cash flow problems, that could be a sign that we need to review our pricing.
We also know that people's buying habits and the cost of living can impact the products and services we're providing to our customers, so we need to keep that in mind as well.
A lot of the time, costs are always increasing, but often the selling prices can stay the same, so we do need to review that. We don't want to be offering discounts all of the time, so we don't want them to become a routine where we just offer it automatically.
Extra work and revisions – if you're finding that customers are wanting more revisions than your offer, and let's say you offer three revisions of a website, as an example, and people are asking for four or five, that's taking your time up.
So actually, is the message clear from the outset, or do we need to increase our prices to allow for those extra revisions?
Some products or services do sell well, but we know they're not going to make as much profit. Sometimes that's fine, with the example somebody mentioned of a loss leader, where we deliberately sell something making very little profit because we know it's going to bring us a new audience in.
That's absolutely fine as a marketing strategy, but we've still got to make sure we're selling the bigger-profit items to be able to cover our costs accordingly.
So when did you last review your prices? Anyone want to pop that into the chat?
Brilliant, positive responses so far – one within the last six months, January this year, in every proposal. Lovely.
Constantly – so Jess is saying that because they buy timber, prices change. August, Ben is saying no, it doesn't.
And this is why we're doing this, because we need to be reviewing them at least annually, if not a bit more frequently than that, because we know the cost of living, and the cost of purchasing different goods and services, change.
So we do need to be on the ball with that, because you want to make sure you're working hard in your business and that you're making a profit from it.
I'm just having a quick look at the comments there. Okay.
So, pricing checks for you – I want you to do your review from this, by thinking about taking one product or service and calculating its direct cost.
Remember, we said direct is a variable cost – the costs that change in relation to the number of sales you're making, and this can include your time.
I want you to check the value, the selling price, and the gross profit.
As we come to the end of this very quick session, I want you to think about what is the one thing you're going to review this week when it comes to pricing, and pop a comment in the chat – and then we'll open the floor to any questions.
So Isabelle's just popped in there – improving packaging. Yeah, that's a good one, because you're going to have to spend quite a bit of money on packaging, and those costs can creep up if we're not managing and monitoring them.
It could be that we need to change suppliers. Your classic example, from a few years ago, is when the war broke out in Ukraine, and there were supplies being purchased either from Ukraine or Russia, and the prices were massively impacted and couldn't be purchased.
So they had to find different suppliers in different parts of the world. And delivery costs as well – they can be massive, can't they?
New euro packaging – yeah. So all of these things, if you're exporting or importing goods as well, there are going to be additional considerations with that.
So thank you for listening, and I invite any questions. Let me pop that last slide on there.
Beth: Perfect. Thank you, Tara – that was great. Okay, yes, let's move on to questions.
So Phil said – yeah, no, if you have any more, please send them in the Q&A. So in Phil's sector, no one publishes the prices.
Tara: Do you know what, there is – it's called the FAME database. It's changed its name, but if you Google FAME database – F-A-M-E – it's changed its name.
Universities use it for students who want to do live case studies. Don't sign up for a paid version, but on a free version, you can usually access really detailed information on most companies.
So you'd get information from Companies House, plus a lot more detail. So that could be a way to see whether those competitors are listed on there for you, Phil.
Beth: Thanks, Claudia. Any other questions? Yes, so I've just seen a few in the Q&A.
So, Tara, what's the difference between a fixed and a variable cost, and why does it matter for pricing?
Tara: So your fixed costs are the overheads we've got to pay, where it doesn't matter how many items we're selling. But your variable costs change in relation to the number of sales.
So it's important, when it comes to pricing, that we get to grips with what the variable costs are – the ones that change – and make sure we're covering those. And also what the fixed ones are, that we've got to pay irrespective of how many sales we're making.
So we've got to make sure we cover all of those, because if you've ever been given a profit and loss account from your accountant, that's where you'll be able to see your variable costs and your fixed costs, and it will give you more data to make better decisions.
So if you're using any accounting software, have a look at your profit and loss report, and it will show you the gross profit and the net profit.
Your gross profit is your profit margin from the cost of operating. Your net profit is the margin from the whole business, and we want those margins to be as high as possible.
Beth: That's great, thank you. And there's just one in from Dan here – Dan says, apologies if this was discussed, what's your opinion on value-based pricing, whereby the price of the service is based on the solution and business?
Tara: It is tricky, but I think it comes back down to the value of that solution. If that solution's going to create value for a long time to come, then absolutely, you should price for that accordingly.
If it's shorter term, then maybe you wouldn't go as high on the value-based pricing. But also, see where you fit with competitors – do you want to be the Ryanair or the Emirates, in terms of what you want to be known as in your sector?
Beth: Yeah, absolutely. Okay, thank you. So Chris asks, how do we quantify the risk we save for customers when pricing?
Tara: It could be a case of setting up a spreadsheet where you've got your costing – your selling price, your variable costs, and your gross profit.
And then you could play about with the discounts to see whether you could still cover all of your costs if you were to discount that. So it's about having some spreadsheet templates set up that could help you make those decisions.
Because discounts are good – customers want them, and they may go to competitors if you don't offer it. But I think you need to be confident that, if you were offering everybody, say, 10% as an example, that you're still going to be able to cover your costs at the end of the month.
Beth: That's great, thank you. So, Tara, I know we've kind of mentioned this, but why can more sales sometimes mean less profit? Can you walk us through how that happens in practice?
Tara: Because if we're selling at a lower selling price and we're not covering our costs, then we can be really busy selling, and at the end of the month we've not covered our costs, because we're not pricing effectively.
So you've got to charge your customers an amount of money that – let's say you need 10 customers a month at a certain rate – you know you're going to be able to cover your bills and take a wage from it.
If you've got loads of sales and maybe you're charging too little, then yes, everyone's buying your product or service, but that's not actually solving the problem, because you're going to run out of cash, as you're not going to get enough cash to be able to pay your bills.
Beth: Yeah, okay, yep. And then, what are the warning signs that your pricing is quietly eroding your profit?
Tara: If you use accounting software, run your profit and loss account. And it should usually, depending on how it's set up, allow you to get the percentages from that.
You want to be tracking whether it's increasing or decreasing – that gross profit margin. It could be that it's decreasing, but it's fine, because you've spent a bit more on marketing that's going to give you a bit of a return on investment.
And I noticed a question about what a good gross profit looks like – the higher, the better, but some industries are notoriously low, like retail, which is quite low, and that's just how that sector is. Whereas others are quite high.
So a simple Google search for average profit margins for your sector would be the starting point for that. But also ask your accountant, because your accountant will do the accounts of all of their customers day in, day out.
They'll be able to give you a rough idea, because they may have seen another organisation that sells scarves, like Shweta's mentioned in there, and be able to give you an idea that somebody doing similar has this profit margin – without giving anything away that's GDPR.
Beth: Yeah, that's a really good way to look at it, isn't it?
Tara: Yeah, absolutely.
Beth: We've got a few minutes left, if that's okay. I think there was one we missed, about more questions – do you have a spreadsheet for a pricing calculator?
Tara: You know, I was working on preparing one, and I got sidetracked because I've launched a new business. But I could send that through to Beth – bear with me, it might be another week or so.
But I could put something together to help you think about how you price these things, if that would help. If that's allowed – is that allowed?
Beth: Yeah, of course, that absolutely is. Happy to share that.
I'm just looking in at the chat – so there's a question here. If you've got a stronger brand, but after researching your competition, you were charging too little, but your production costs are lower, should you still look at increasing your prices?
Tara: I think it depends on what you want from business as well, because for some businesses, you have a lifestyle business, where you're quite happy doing it in that way. But if you want to grow, and there's scope in the market to do that, then absolutely, you would increase your prices.
Because what you can then do is build up your reserves – build up some extra cash in the bank, and that might help you grow, or take on a member of staff, or maybe take some dividends out of the business, because you live and breathe your business, don't you?
Beth: Yeah, that's absolutely right. Okay, we've got a few more questions in – I'm conscious of the time, but we'll see if we can get through a few more.
Just to point out, we have posted Tara's LinkedIn profile, so please do feel free to connect. Thank you.
Tara: And I've put some money-saving questions to ask on there. So if you go onto my Instagram, you can download that as well for free, to ask your accountant.
Beth: Okay, so one in from Victoria – Victoria says, say that you're aware that you're underpricing, what's the best way to increase prices with existing clients without putting them off?
Tara: Great question – give them notice, and just say, actually, it could be that you give them three months' notice, as an example. The more notice you give, I think the more likely people are to be receptive to that, because in general, everything goes up in business.
And I suppose it depends on how high – if it's massively increasing, and that's going to make it unaffordable for them, then yes, you will lose customers. But I think having that conversation with them – say we're looking at increasing our prices in three months' time to this – and having that conversation with them.
Beth: Yeah. Be transparent.
Tara: Because it's that rapport you build with your customers as well, and they'll appreciate that.
Beth: Absolutely. Okay, that's great to know. There are still a few questions for that, but we are now at half past.
So please do feel free to reach out to Tara, and I'm sure she'd be happy to answer a few more questions after the session. But that was really great – thank you, Tara. So much engagement in the chat.
So, thank you again for joining today's Powering Local Business Lunch and Learn. We'll be sharing the recording, along with some further resources, in the follow-up email this afternoon.
So, a huge thank you to Tara for such a practical and energising session. Thank you – leaving with a much clearer picture of how to price for the profit your business deserves.
So, yeah, thank you, and have a lovely rest of your day. Thank you.
Tara: Good luck with it, everybody. Thanks for joining. Bye.
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