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Understand what your price needs to cover.

Give the work, costs, and customer decision their own place before choosing a price.

Start with the thing someone is buying

Describe one sale in ordinary words: one visit, a packaged item, a monthly service, or a defined project. Write what is included and what would need a separate discussion. Use that same unit for the price, time, costs, and sales count.

A batch is different from an item, and an order can contain several items. If a fee applies once per order, you need a sensible per-item allowance or an order-sized unit. A calculation with mismatched units can look precise while answering the wrong question.

Bring the less visible work into the picture

List what a sale uses: materials, packaging, delivery, and other direct costs. Then consider preparation, travel, messages, delivery, and follow-up. Keep evidence beside the estimate: a recent invoice, time from an actual job, or a question still to check.

List the materials, paid work, your own time, fees, and monthly costs that this offering needs to support. Counting those entries gives you a calculation to review alongside the customer’s decision and the value you intend to deliver.

Background: SBA: Plan your business

Give your own time an explicit allowance

In this explorer, paid labor and your own time have separate labels. An allowance for your own time helps you see whether the offering leaves room for the work you put in, even if you do not pay yourself a wage for each job.

Once that allowance is included, it has already been deducted from the amount left. Do not read the remainder as all the money available to pay you. Equally, including an allowance does not mean the cash has actually been paid. This worksheet explores cost coverage; it does not maintain your books or forecast payment dates.

If wages are entered per sale, avoid also including the same wages in monthly overhead. For employees, consider the full hourly employment cost relevant to your situation rather than treating the headline wage as the whole cost.

Notice what changes when the price changes

Some fees are a percentage of the price. Raising the price changes those fees too. The explorer calculates the percentage fee on the price entered, rounds it to the nearest cent, and adds the fixed fee per sale.

Actual providers may use a different fee basis, such as an order total including tax. Check the rule that applies to you. Use prices before taxes collected from the customer, and include purchase costs you actually bear. The explorer does not calculate tax; get help with the treatment if you are unsure.

A markup and a margin describe different ratios. If the relevant cost is 80 and the price is 100, the difference is 20: a 25% markup on cost, or 20% of the selling price. The explorer labels its remainder directly and keeps monthly costs separate, so it is not presenting that remainder as an accounting profit margin.

Give monthly costs a realistic share of the work

Rent, insurance, and other recurring costs may need covering across several offerings. Enter only the monthly costs you want this offering to cover, alongside an expected sales count. Record how you chose that allocation.

The SBA's break-even method divides fixed costs by the amount each sale contributes after variable costs. This explorer applies that relationship to the costs and time allowances you enter. A positive contribution is needed to recover positive monthly costs. When each sale has a shortfall, selling more under the same assumptions makes that shortfall larger.

Background: SBA: Plan your business

Check whether the work fits

Twenty sales at three person-hours each need sixty person-hours of the work you have listed. The optional availability field compares that total with the hours available for this offering. Leave room for the other work and commitments that also use people's time.

This is a simple total-hours check. It cannot establish whether the right person, equipment, or appointment slot is available. Use it to identify a question for your schedule, especially when the sales needed to cover costs exceed what the available hours could deliver.

Compare one uncertainty before making a bigger decision

Keep your starting figures and create a separate change. Try an extra hour, a higher material cost, a different price, or lower monthly sales. Begin with one change so you can understand its effect, then explore a combined case if it is useful.

A cost-covering price only covers the entries under the stated assumptions. It does not establish what customers value or will pay. Use a customer conversation or a small test to investigate the offer, while keeping cost assumptions and demand assumptions distinct.

Background: SBA: Plan your business

Keep the next question with the numbers

Choose the assumption that most needs checking. You might time a real job, confirm a supplier's fee, clarify how many revisions an offer includes, or ask customers about how they currently solve the problem.

Download the reusable file so you can return to both versions and revise them when you learn more. The text and PDF copies include the entered figures, calculation results, assumptions, and notes. None of those outputs turns a planning estimate into a verified business result.

Try it in your own situation

Try one price question in your own work

  1. Describe one sale and what it includes.
  2. List the direct costs and the full time involved; keep estimates visible.
  3. Enter a price and check what remains before monthly costs.
  4. Optionally add the monthly costs assigned to this offering and realistic sales and hours.
  5. Copy your starting figures and change one uncertain assumption.
  6. Choose one real-world check, record when you will return, and keep the exploration.

Keep exploring.

Have a useful first customer conversation. Explore Running a business
Sources and further reading

Original Brass Charter examples and exercises, with background reading from the sources below.

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