Calculations inspire confidence. Particularly when it comes to pricing. Founder Alli Manning found that out mid-acquisition, staring down the one question every deal eventually forces: what does this product cost now? 

Shortly after crunching the numbers for the upgraded line she made a deliberate call: price higher than the business ever had. 

Instead of guessing or anchoring to industry norms, Alli ran the math. That spreadsheet-backed clarity led her to confidently relaunch at a fresh, premium price point. Take this as your cue to do the same. 

With Poker Math, the Price is Right

A poker player deciding whether to call a bet compares what she'd risk against what she'd stand to gain, based on real odds. At the table, that comparison is known as expected value. 

Pricing uses the same logic. Risks like customers bailing at checkout, possible churn, or maybe a sales dip while the market catches up to where you've repositioned are real. But what you stand to gain is just as significant. Higher price points can be read as premium products. Your margins may also grow solid enough that you don't need every sale to hit your goal, giving you room to reinvest in the product instead of racing competitors to the bottom.

Run the math in this way, and those figures come pre-loaded with confidence. 

5 Steps to Find Your Price Point

Five numbers stand between you and a price you never have to second guess.

1. Cost Basis. Add up everything it costs you to deliver the product or service: materials, labor, overhead, even your own time at an honest hourly rate. This number is your floor. Everything you charge above it is profit you can pocket or reinvest in your business. 
2. Margin. This is your cut. Pick the percentage you want baked into every sale, before you set the price. The Corporate Finance Institute puts a healthy net margin at 20%, a solid gut check if you've never had to put a number on this before. Whatever percentage you land on, decide it first rather than backing into it.  
3. Competitor Benchmark. Find three to five direct competitors and price out their comparable offer. Consider this your scouting report. Now pick your seat at that table. If two or three competitors cluster around one number, that's the room's default. Price yourself above it, and you're betting your product earns the difference.
4. Perceived Value Signals. List what makes your product worth more than a generic version of the same thing: better materials, faster turnaround, a guarantee competitors don't make, a track record they can't touch. Every one of those is a reason a buyer hands you more money.
5. Willingness-to-Pay Data. Ask five to ten real or prospective customers what they'd expect to pay. Keep your hidden figures to yourself. Alternatively you may pull what other customers have already paid for similar products elsewhere. Either way, you're looking for the highest price real people will pay before they fold. 

Calculate all five, and you've got a range — and a number inside it, backed by math you can show.

A Closer Look at Alli's Math

When Alli’s brand relaunched after the acquisition, she used the moment to upgrade her prices.

The product had genuinely improved: better materials, a broader line, the credibility of a 25-year-old brand now folded into hers. That's real perceived value, tied to a real business milestone she could point to. She ran her cost basis against the new production reality, checked it against where comparable brands were pricing their premium lines, and factored in what customers had already shown they'd pay for quality gear in this category. The higher price points emerged directly out of that math.

Alli also has a habit of playing out multiple scenarios before committing to one, so she can adjust fast if a read misses, while still moving decisively in the moment. Pricing, for her, is a call she's certain of today and ready to pivot tomorrow if the numbers move.

When to Rerun the Numbers

A pricing calculation has a shelf life, and the inputs that built it aren’t static.

Your costs shift. Competitors reposition. The value you're delivering probably looks nothing like it did a year ago, especially if you've added capabilities or built a track record since you last set your prices. Any one of those changes is a reason to rerun the calculation. 

Set a standing check-in. Once a quarter, once a year, whatever fits your business rhythm — pull the five figures again and see how their range shifts.

Your business has too much potential to run on autopilot.