Why Working Harder Doesn’t Always Mean Earning More
If you’re working 24/7 and still wondering where the money’s going, you’re probably undercharging.
It’s one of the most common problems we see among business owners. You’re busy, clients are coming in, sales look decent on paper, yet your bank balance never quite reflects the effort you’re putting in.
The truth is, most business owners price based on what they think people will pay, not on what they actually need to make a profit.
Let’s fix that.
Why Undercharging Happens
It usually starts with good intentions. You want to attract clients, stay competitive, and build a reputation, so you set your prices on the lower side. It feels safe and helps get the ball rolling.
But the problem comes when your costs rise, your workload increases, and your prices don’t move with them. Suddenly you’re working harder, but your margins are shrinking.
Many business owners also fear losing customers if they raise their prices. The result is long hours, low profits, and high stress.
The Real Cost of Undercharging
When you undercharge, you don’t just reduce your income. You also:
Limit your ability to reinvest in the business
Struggle to hire staff or outsource help
Attract clients who value price over quality
Burn yourself out trying to do everything on your own
Over time, this leads to a business that feels busy but not rewarding. You might look successful from the outside, but behind the scenes, you’re running on fumes.
Pricing for Profit, Not Guesswork
The key to fixing this is to understand your numbers.
You can’t price properly if you don’t know your costs. That means getting clear on:
Your overheads (rent, software, insurance, subscriptions)
The cost of goods or time needed to deliver your service
How much profit you actually want to make
Once you know these, you can reverse-engineer your pricing. Start with the profit target, then add your costs and time to find the price you need to charge to make it worthwhile.
Pricing based on profit rather than perception is how you build a sustainable business.
How to Review Your Prices
If it’s been a while since you looked at your prices, now’s the time.
Ask yourself:
When did I last raise my prices?
Do my current prices cover all my costs, including my time?
Do I know how much profit I make per sale or service?
Would I still be making money if I took on fewer clients?
If the answer to any of these is no, it’s time for a review. Even a small price increase can make a huge difference to your bottom line.
Communicating Price Changes
Worried about losing customers? Don’t be. Most people understand that costs go up. If you’ve been undercharging for a while, you might be surprised how many clients stay when you explain your value clearly.
Be confident in what you offer. Clients pay for the results, not just the time. If you’re providing real value, your prices should reflect that.
The Bottom Line
Working harder isn’t always the answer. If your business feels like it’s running you instead of the other way around, pricing is the first place to look.
Know your costs, understand your margins, and set prices that reflect the quality and value of what you do. You’ll work smarter, earn more, and finally see the results your effort deserves.
At Rhombus Accounting, we help business owners like you understand their numbers, improve profitability, and build pricing strategies that actually make sense.
Meet Lewis
Lewis is a professional accountant and founder of Rhombus Accounting. He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.
Book a call today to learn more about what Lewis and Rhombus Accounting can do for you.
