Price to survive and grow
Your price must cover the cost of the item, your time, overheads, a profit, and something set aside for tax. Selling below true cost feels busy but goes backward.
Cost-plus pricing
Start with cost per unit, add a margin (profit), and reserve a slice for tax. If a unit costs 40 and you want a 35% margin on the selling price, price it near 62 — not just 40 plus a little.
Tax is not your money
Set aside a share of each sale for tax as it comes in, so tax time isn't a shock. Rules differ by place — check your local tax office; this is a habit, not tax advice.
A carpenter charging 'what neighbours charge' finally costed a chair honestly: timber, varnish, transport, and his own day's labour. He was earning 3 per chair. Repricing with a 35% margin lost him two bargain-hunting customers and gained him weekends — same chairs, triple the take-home.
Practice
Why reserve part of each sale for tax?
Because tax is owed later — setting it aside as you sell avoids a shock at tax time.
A unit costs 40 and you want real profit. Is pricing at 45 enough?
Usually not — 45 barely covers cost, time and tax. Cost-plus with a margin gives a healthier price.
Open the Pricing Calculator. Enter your unit cost, then raise the tax reserve. At what point does profit per unit turn negative?
When margin plus tax reserve leave nothing above cost. That point shows the minimum margin you must charge to stay profitable.
Work out your true cost for one item — materials plus a fair value for your time — and write it down.
Most people forget their own hours. Once time is counted, you can set a price that actually pays you, not just covers materials.
