Most small-business owners base their pricing on one of three things:

1. What competitors charge
2. What “feels fair”
3. What they think customers will tolerate

None of these are rooted in reality.

They’re guesses.

And when your pricing is built on guesses, your entire business becomes fragile — even if you’re working incredibly hard.

Here’s the truth most owners eventually learn the hard way:

You don’t rise or fall based on your price.
You rise or fall based on your margins.

And your margins come directly from your bookkeeping.

Let’s break it down.

1. Undercharging Isn’t a Pricing Problem — It’s a Math Problem

You might feel like your price is too high already.
You might feel bad raising it.
You might feel scared of losing customers.

But here’s what your books can reveal in five minutes:

• How much your real overhead costs per month
• What your true cost per job or per product is
• Whether you’re profitable after paying yourself
• How much margin you actually keep
• Which services or products are carrying the business
• Which services are silently killing your profit

Most owners don’t need more customers.
They need better math.

And better math comes from clean books.

2. Most Businesses Have “Invisible Expenses” They Forget to Price For

This is the root issue.

Owners price based on:

• Materials
• Labour
• Time

But they forget to include:

• GST/HST remittances
• Insurance
• Software
• Equipment wear
• Vehicle costs
• Admin time
• Payroll taxes
• Loan payments
• Refunds or chargebacks
• Time lost to customer communication
• Professional services (CPA, bookkeeping, legal)

These don’t show up in your mind —
but they show up in your books.

If you’re not pricing based on your real cost structure, your business will always feel harder than it should.

3. The Most Dangerous Sign: “I’m Busy, But I’m Still Broke”

This is the classic underpricing symptom.

You’re fully booked.
You’re working hard.
Clients are happy.
You’re delivering huge value.

But cash is tight.

This means one thing:

Your price is too low for the work and cost required.

Busy + broke is not a work ethic problem.
It’s a pricing problem.

And clean books expose it instantly.

4. The Margin Formula Every Owner Should Know

Your true margin isn’t:

Price – materials

It’s:

Price
– Direct costs
– Overhead
– Owner pay
– GST/HST
= Real margin

When owners do this calculation for the first time, they almost always say:

“Wow… I didn’t realize I was only keeping that much.”

Most are keeping far less than they think.

5. Raising Prices Doesn’t Lose Customers — Poor Positioning Does

The fear of raising prices is real.
But it’s often exaggerated.

Here’s what actually happens when owners raise prices correctly:

• Low-margin clients leave
• High-value clients stay
• Business becomes calmer
• Profit increases
• Stress decreases
• Time becomes more valuable
• The business grows with fewer clients

Price increases don’t damage businesses.
Unprofitable pricing does.

6. How Castle Bookkeeping Helps You Price Properly

We don’t guess.
We calculate.

And we show you:

• Your real cost per service or product
• How much each client actually contributes to profit
• Whether your current price supports your lifestyle
• Where your margin is leaking
• What your minimum sustainable price should be
• When it’s time to raise prices
• How to structure pricing so it scales
• How to plan for payroll, taxes, and growth

Pricing should be logical, not emotional.
Your books give you the clarity to price with confidence.

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