Why most small businesses in Botswana undercharge (and how to fix it)

The most common financial mistake in a small Botswana business is not bad spending — it's undercharging. Most founders price based on what feels comfortable to say, or what they think the client expects to pay. Neither of those builds a sustainable business.

The real cost of undercharging

If you charge P200 for a service that costs you P180 to deliver once you account for your time, materials, and fixed costs, you are working to stay poor. Every additional client makes the problem worse. Growth at the wrong price point is business destruction in slow motion.

The correct pricing method

Start with your total monthly costs — rent, salaries, data, transport, everything. Divide by how many jobs or units you produce per month. That's your cost per unit. Then add your desired profit margin on top. That's your floor price. You should never price below it.

Example: monthly costs P8,000. You complete 20 jobs per month. Cost per job: P400. At a 30% margin: P400 ÷ 0.7 = P571 minimum price per job. If you're charging P300, you're losing money on every client.

What about the market rate?

Know what competitors charge, but don't let it set your price. If the market rate is below your cost-plus-margin floor, you have one of two problems: your costs are too high, or you're in the wrong segment. Use the Pricing Calculator on this page to find your actual number.

How to raise prices without losing clients

The fear of raising prices is almost always worse than the reality. Give existing clients 30 days notice. Explain the increase without apologising for it. Most clients who value your work will stay. The ones who leave over a reasonable price increase were probably not profitable clients anyway.