“I Know My Cost… But What Should I Charge?”

“Knowing your cost tells you where you stand. Setting your price determines where your business is going.”

Welcome Back

Sarah had spent the week doing something she had never done before.

She calculated the cost of one bottle of coconut oil.

Not just the coconuts.

Not just the bottle.

Everything.

Fuel.

Transport.

Labels.

Packaging.

Electricity.

Her time.

When she finished, she looked at the number and quietly said,

“I never realised it cost this much.”

For the first time, she understood what her product truly cost.

She felt proud.

But only for a moment.

Then another question appeared.

“Now what?”

Market Day

The following Saturday, Sarah went to the market.

As she walked around, she noticed something strange.

Three women were selling almost the same product.

One bottle was VT500.

Another was VT650.

The third was VT800.

She couldn’t understand it.

How could the same product have three different prices?

Was someone being greedy?

Was someone making a mistake?

Or was there something she still didn’t understand?

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A Conversation with Lina

Sarah sat beside another vendor named Lina.

Lina had been in business for years.

Sarah asked,

“Why are your bottles more expensive than mine?”

Lina smiled.

Instead of answering, she asked a question.

“What happens if your equipment breaks?”

Sarah paused.

“I don’t know.”

“What happens if the price of coconuts goes up next month?”

Sarah shrugged.

“I’ll have to manage.”

“What happens if a customer wants ten bottles tomorrow?”

“I hope I can afford to make them.”

Lina nodded.

Then she said something Sarah would never forget.

“Your price is not just for today. Your price must protect your business tomorrow.”

The Difference Between Cost and Price

Sarah realised something important.

Her cost told her how much it took to produce the bottle.

But her price had to do much more.

Her selling price had to:

• Pay for every cost.
• Leave enough money to replace equipment.
• Help the business grow.
• Cover unexpected problems.
• Reward her for the work she had done.

Without that extra margin…

The business would always be working just to survive.

A Lesson from the Garden

Imagine planting a pawpaw tree.

If every piece of fruit is eaten immediately, what happens when the tree becomes sick?

Or when a cyclone damages it?

Or when you need to buy more seedlings?

There is nothing left.

A wise farmer keeps some fruit for today…

And some for tomorrow.

Business works the same way.

Profit is not money to waste.

Profit is money that gives your business a future.

Coach’s Conversation

If I asked you today,

“Why do businesses make a profit?”

What would you say?

Many people answer,

“So I can earn more money.”

That’s only part of the answer.

A healthy profit allows your business to:

✔ Replace old equipment.

✔ Buy better tools.

✔ Improve packaging.

✔ Save for emergencies.

✔ Introduce new products.

✔ Employ someone.

✔ Expand into new markets.

Profit isn’t just about the owner.

It’s about making sure the business is still standing next year.

A Common Mistake

Sarah thought,

“If my product costs VT450, I’ll sell it for VT500.”

She felt that was fair.

But was it enough?

What if transport increased next month?

What if bottles became more expensive?

What if she accidentally damaged ten bottles?

What if she wanted to attend a business training course?

Where would that money come from?

Without a healthy margin, every unexpected expense becomes a crisis.

Price Is More Than Numbers

Lina explained something else.

Customers don’t only buy products.

They buy:

• Quality.
• Consistency.
• Trust.
• Good customer service.
• Clean packaging.
• Reliable delivery.
• Professional presentation.

Two businesses can sell similar products.

One charges more because customers trust the experience they receive.

Price reflects more than cost.

It also reflects value.

Your Turn

Choose one of your products or services.

Write its estimated cost.

Product:

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Estimated Cost:

VT ______________________________

Now answer these questions.

Why did you choose your current selling price?

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If someone asked why your product costs this much…

Could you explain it confidently?

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What value do you offer beyond the product itself?

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Coach’s Insight

One of the biggest changes I see in business owners is not when they increase their prices.

It’s when they finally understand them.

Once you understand your costs and your value, you stop apologising for your price.

Instead, you begin improving the quality that supports it.

Your goal should never be to become the cheapest business.

Your goal should be to become the business customers trust.

This Week’s Challenge

Choose one product.

Calculate:

• What it costs you.
• What you currently sell it for.

Now ask yourself:

“If I continue selling at this price for another year, will my business become stronger or weaker?”

Write down your answer.

Be honest.

Business Reality Check

Tick the statements that describe your business.

☐ I know the difference between cost and selling price.

☐ I understand why businesses need profit.

☐ I sometimes set prices based on emotions.

☐ I can explain the value behind my products.

☐ My prices allow my business to prepare for the future.

☐ I need to review my pricing.

Becoming a Better Business Owner

Today’s lesson wasn’t really about pricing.

It was about believing that your business deserves a future.

Every time you set a selling price, you make a decision.

Will this price only help me survive today?

Or will it help my business grow tomorrow?

Business owners who think only about today remain busy.

Business owners who think about tomorrow build businesses that last.

Looking Ahead…

Sarah felt more confident than ever.

She understood her costs.

She reviewed her prices.

She started making better decisions.

Business was improving.

Orders were increasing.

Customers kept coming back.

Then one evening she looked around her kitchen.

There were bottles on the table.

Orders on her phone.

Labels waiting to be printed.

Customers asking questions.

Her children calling her.

The rice was cooking.

The phone kept ringing.

She sat down, took a deep breath, and whispered,

“I’m doing everything myself… and I can’t keep up anymore.”

That is where our next episode begins.

Because every growing business reaches the moment when hard work alone is no longer enough.