Three Ways I Can Tell Your Pricing Might Be Too Low
At Magnolia & Main, we have walked alongside enough small business owners to know this for certain: most folks are charging less than they should. It is not because they do not care or are not talented. It is because pricing can feel blurry, emotional, and a little intimidating when you are trying to keep the lights on and serve your people well.
But here is the truth. Your prices should support your business, your life, and your future. If they are not doing that, it is time to take a closer look. Below are three red flags we spot all the time when someone’s pricing is not serving them the way it should.
1. Your expenses are eating your profits.
This one is not always a sign that pricing is too low, but it is one of the first places we look.
If your total business expenses are taking up more than 60 to 70 percent of your revenue, there may not be enough left to cover taxes, savings, owner pay, or any kind of cushion. That is when business starts to feel stressful instead of sustainable.
Here is a healthier benchmark:
✨ Product-based businesses: Total expenses around 50 percent
✨ Service-based businesses: Total expenses around 30 to 40 percent
If you are well above those ranges, it may be time to look at tightening expenses, adjusting pricing, or both. And there is no shame here. This is part of the normal ebb and flow of running a business.
2. Your prices do not reflect your market or your value.
This does not mean copying your competitors. It means paying attention to the landscape.
If businesses with similar offerings, similar experience, and similar client results are charging more and staying booked, that tells us something. It is not about undercutting or competing. It is about making sure your rates reflect the quality and value you bring to the table.
Sometimes the gap is not the market.
Sometimes the gap is that you have grown, but your pricing has not.
3. You are saying yes to everything just to stay afloat.
If you are constantly adding custom work, squeezing in last minute clients, or saying yes out of fear instead of strategy, that is not a work ethic problem. That is a pricing problem.
Your pricing should protect your time, your energy, and your mental bandwidth.
It should support the life you are building, not drain the life out of you.
When you are charging sustainably, you no longer rely on volume or overextension to make it work. Your calendar gets lighter, your boundaries get clearer, and your business feels easier to carry.
Bottom line
You deserve pricing that makes your business feel doable, not exhausting.
You deserve numbers that give you room to breathe, room to plan, and room to grow.
If you are looking at your books wondering whether it is time for a change, that is your sign to dig deeper. We are rooted here to walk through that with you, one clear and steady step at a time.
Ready to get a clearer picture of your numbers? Let us talk.