Stop setting prices by copying competitors

Methodology and author

Define context, complete inputs, produce, review and adapt. Designed and signed by Julio Alonzo. Designed and signed by Julio Alonzo.

Requirements and limitations

Unit cost = direct cost + hours × hourly rate. Source figures are fictional and expressed in USD. The example covers 12 months; volume counts billable units over that period. A project, workshop, service month and subscriber-month are different units: do not add their quantities together. q = overhead + fees + commission + configurable tax. Each component is treated here as a share of revenue net of discounts. Tax is an illustrative configurable charge, not a jurisdiction-specific tax calculation or necessarily VAT or profit tax. Avoid double-counting a cost already included in direct cost. Margin = profit/revenue after modeled charges. Minimum price = cost/(1−q). Target price = cost/(1−q−target margin). q + target margin must be less than 1. For cost 1,000, q 23% and margin 35%, the target price is 2,380.952381 and realized margin is 35%. Markup = (price/cost)−1. Markup price = cost × (1+markup). Markup is not margin. Premium uplift applies to the target price. Calculations use full precision; display formatting shows two decimals. Validate the margin if you round a commercial quote. Method 0 uses the margin-based target price; method 1 uses the markup price. Net price = list price × (1−offer discount) × (1−case discount). Profit = revenue − percentage charges − total cost. With the example above and a 20% discount, margin falls to 24.5%. Editable cases: conservative = cost ×1.10, volume ×0.80, additional discount 10%; base = ×1.00, ×1.00, 0%; aggressive = ×0.95, ×1.20, 0%. These are added illustrative assumptions. One selector changes the same five-offer calculation; base list prices stay fixed while cost, quantity and discount vary. Sensitivity uses the selected offer, chosen method and base inputs. It excludes offer and case discounts. The native two-variable table substitutes the local cost and volume factors. Recalculate in automatic mode when inputs change. Review checks and the base point after opening in another application. Zero cost or zero revenue is allowed, but margin with zero revenue is unavailable. Blank, text, negative or impossible-rate inputs show REVIEW. The status compares realized margin with target; it does not assess demand, capacity or risk. Checks tests domains and reconciliations, not every possible manual alteration. The native Microsoft Excel interface was not tested.

Cutoff date: 2026-10-12