Understand the real cost
Include more than the obvious materials. Consider labour, delivery, overheads and the wider cost of providing the product or service.
Pricing calculator for small business UK
Work out what to charge without guessing, copying a competitor or hoping the margin works.
Polar Pricing Studio helps small businesses work through costs, overheads, margin, competitor pricing and customer value to build a price that makes commercial sense. Test different scenarios before putting the number in front of a customer.
Costs and overheads
Margin and markup
Pricing scenarios
Inside Polar · Pricing Studio
Example
PRICING STUDIO
Price your service
Build the price from the business underneath it, not from a competitor’s website.
CURRENT PRICING SCENARIO
Commercial maintenance visit
£128
True delivery cost
35%
Target gross margin
£197
Indicative selling price
Direct labour
£68
Materials
£24
Travel & delivery
£16
Allocated overhead
£20
True cost
£128
Polar view:
at £197, this example creates approximately £69 gross contribution
before other business considerations.
Pricing strategy for small business
Your price has to work for the customer — but it also has to work for the business.
Pricing too high can make winning work harder. Pricing too low can create a busy business that still struggles to make money. Polar helps you look at the whole pricing picture before deciding what to charge.
Choose the margin you need
Test what happens to the selling price when different profit and margin targets are applied.
Check the market reality
Compare the calculated price with customer expectations, competitors and the value of the offer before deciding what to charge.
How to price a service
Start with the cost of delivering the work — then build upwards.
Service businesses often underprice because only the obvious working time is counted. The price may also need to support travel, admin, quoting, software, insurance, vehicles, premises and other overheads.
Time
Estimate the genuine time required to deliver the service properly.
Materials
Include stock, consumables, parts and other direct costs used on the job.
Travel & delivery
Account for fuel, travel time, delivery or other costs of reaching the customer.
Overheads
Allow the work to contribute towards the wider cost of keeping the business operating.
Risk
Consider uncertainty, callbacks, wastage and other commercial risks where relevant.
Profit
Build in enough return for the business to remain worthwhile and sustainable.
Competition
Understand how the market is priced without automatically copying competitors.
Customer value
Consider what the solution is worth to the customer, not just what it costs you to provide.
Profit margin calculator
Margin and markup are not the same thing.
Confusing markup with margin can leave a business earning less than expected. Polar helps you see the effect of the price on the money left after the direct cost of delivering the work.
Markup vs margin.
If a service costs £100 and you add a 50% markup, the selling price becomes £150. But the gross margin is not 50% — it is approximately 33%.
Why it matters:
setting prices using the wrong percentage can make a pricing plan look more profitable than it actually is.
setting prices using the wrong percentage can make a pricing plan look more profitable than it actually is.
Simple example
True cost
£100
50% markup
£50
Selling price
£150
Gross contribution
£50
Gross margin
33.3%
Minimum profitable price
Know the line you should think very carefully before crossing.
One of the most useful pricing numbers is the point below which the work stops making commercial sense. Polar helps you understand the relationship between true cost, target return and selling price.
Three prices worth knowing.
A useful pricing decision can compare more than a single number.
Cost floor
The underlying cost of delivering the work before profit.
Target price
The price that supports the margin or commercial return you are aiming for.
Market price
The price customers may realistically accept based on alternatives and value.
Hourly rate calculator
Your hourly rate has to pay for more than the hour in front of the customer.
For businesses selling time, a workable hourly rate may need to cover non-billable hours, overheads, holidays, admin, sales activity and the return the owner needs from the business.
Billable hours
Estimate how much working time can realistically be charged to customers.
Non-billable time
Allow for quoting, admin, travel, training and other time that still has to be funded.
Business overhead
Make sure the hourly rate contributes towards the cost of running the wider business.
Small business pricing methods
There is more than one way to arrive at a price.
The right approach depends on the offer, customer, market and business. Polar can help you think through the logic rather than blindly applying one pricing formula everywhere.
Start with cost and add a return.
Useful for understanding the financial floor, but the final price still needs to make sense to the market and customer.
Consider what the result is worth.
Some services create far more value for the customer than the raw cost of delivering them would suggest.
Use the market as evidence, not instructions.
Competitor prices provide context, but you may have different costs, quality, positioning or customer value.
Build clear levels of value.
Packages can help customers understand the difference between basic, standard and premium options.
Pricing packages for services
Sometimes the best price is not one price.
Offering clear levels can help customers choose based on need instead of turning every sales conversation into a negotiation over the cheapest possible option.
Essential
The core service required to solve the customer’s basic problem.
Recommended
A stronger package that includes the elements most customers are likely to value.
Premium
A more complete option for customers who need greater support, speed or scope.
Discount calculator
Before giving 10% away, understand what it does to the profit.
Discounts reduce the selling price immediately, but most of the underlying cost of delivering the work may stay exactly the same.
A small discount can create a much bigger reduction in profit.
If a £200 job costs £140 to deliver, it originally contributes £60. Giving the customer a 10% discount reduces the selling price by £20 — but that removes one third of the original £60 contribution.
Polar helps you see that impact before pressing send on the quote.
Example discount impact
Original selling price
£200
Cost to deliver
£140
Original contribution
£60
10% customer discount
-£20
New contribution
£40
Contribution reduction
33%
Competitor pricing analysis
Know what competitors charge — but don’t let them run your business.
Competitor pricing can help you understand the market, but another business may have completely different costs, service levels, overheads and objectives. Polar keeps competitor evidence in context.
Price level
Understand whether competitors appear to sit at budget, mid-market or premium levels.
What’s included
Compare the actual scope behind a competitor price instead of comparing headline numbers alone.
Your difference
Decide whether your own value, service or positioning justifies being higher or lower.
Break-even pricing
Pricing and break-even belong in the same conversation.
A lower selling price may mean more sales are needed to cover the fixed costs of the business. A higher price may improve contribution but affect demand. Polar helps connect the pricing decision to the wider financial picture.
Contribution per sale
Understand what each sale contributes towards overheads and profit after direct costs.
Sales needed
See how pricing assumptions affect the approximate volume required to cover costs.
Profitability scenario
Compare different price and sales-volume assumptions before committing to the strategy.
Pricing strategy template
A pricing strategy should explain why the number makes sense.
Polar helps you build the thinking around the price rather than storing one unexplained figure in a spreadsheet.
Your pricing decision in one place.
A useful pricing strategy can bring together the financial, market and customer logic behind what you intend to charge.
True cost
What does the product or service genuinely cost the business to provide?
Target return
What margin or contribution does the business need?
Customer value
What outcome or benefit is the customer actually buying?
Competitor context
What alternatives can the customer already choose?
Final price
Where do those factors leave the proposed selling price?
Review point
When should the assumptions and price be checked again?
Pricing review for small business
The price that worked last year may not work now.
Labour, materials, fuel, software, insurance and other business costs can change. Customer demand and competitor behaviour can change too. Pricing should therefore be reviewed rather than permanently forgotten once it is set.
Costs changed?
Recalculate when major input costs, overheads or labour assumptions move.
Customer response changed?
Review whether the price is creating resistance, weak conversion or unexpectedly strong demand.
Business changed?
Revisit pricing when the offer, service level, positioning or target customer changes.
Pricing connected to the rest of your business
Pricing affects far more than the quote.
The price influences sales, cash flow, profitability, customer conversion and the wider business plan. Polar keeps those decisions part of the same journey.
Startup Costs
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Offer Builder
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Pricing Studio
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Sales Plan
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Quotes
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Accounts
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Reports
Clear pricing for customers
A good price should be understandable as well as profitable.
Once the business has decided what to charge, the customer should be able to understand what the price covers and what they are actually buying. Clear scope and pricing help reduce confusion later.
Clear scope
Explain what is included so the customer and business are working from the same expectation.
Clear extras
Make additional charges or optional services easier to understand before work begins.
Clear quote
Carry the pricing logic into a professional quote with an obvious next step.
Small business pricing FAQs
Questions about setting prices with Polar.
How do I work out what to charge for a service?
Start by understanding the true cost of delivering the work, including labour, materials, travel and relevant overheads. Then consider the margin the business needs, competitor pricing and the value the customer receives.
What is a pricing strategy?
A pricing strategy is the reasoning behind how a business sets and manages its prices. It can include costs, profit targets, customer value, competitor context, positioning and how prices will be reviewed over time.
What is the difference between margin and markup?
Markup is calculated as a percentage of cost, while margin measures the profit or contribution as a percentage of the selling price. They are related but are not the same percentage.
How do I calculate a profit margin?
A simple gross margin calculation compares the selling price with the direct cost of providing the product or service. Polar helps you test different price and cost assumptions.
Should I copy competitor prices?
Competitor pricing is useful market evidence, but another company may have different costs, service levels, positioning and profit requirements. It is better used as context than as an automatic answer.
How do I set an hourly rate?
Consider the owner’s or employee’s cost, realistic billable hours, non-billable time, overheads and the commercial return the business needs.
How much does a discount affect profit?
The effect can be greater than the headline discount percentage because many of the costs of delivering the work remain unchanged. Polar can help compare the original and discounted pricing scenario.
What is value-based pricing?
Value-based pricing considers the value or outcome the customer receives rather than setting the price only from the supplier’s costs.
How often should I review my prices?
Pricing is worth reviewing when major costs change, customer behaviour changes, competitors move, the offer changes or the existing price is no longer delivering the expected commercial result.
Can Polar Pricing Studio connect with quotes and accounts?
Polar Pricing Studio sits within the wider Polar business journey, so pricing decisions can remain connected with sales, quoting, financial planning and the ongoing money picture.
Polar Pricing Studio
Charge a price you can explain, defend and afford to deliver.
Bring costs, overheads, margin, competitor context and customer value together, test the numbers and make a more informed pricing decision before the quote goes out.