Pricing your products and services: the basics for small business owners

Starting a business is always tricky, especially as an expat. This month, Diana Medrea-Morgensen shares insights on how to price your products and services as a small business owner in Denmark.

Photographs: Unsplash

Text: Diana Medrea-Morgensen

When you start a business, deciding what to charge often feels harder than deciding what to sell. For many small business owners, especially internationals in Denmark, pricing is not just a calculation, it is a negotiation with self-doubt, cultural expectations, and a market that does not always behave the way you are used to.

Tell me it isn’t so. How many times have you converted your prices in your head back into your home currency and been scandalised by the amount? How many times have you asked yourself, “Can I really ask for that?” and then felt the rush of impostor syndrome whispering doubts?

This article gives you the basics: four practical pricing methods you can use, and some guidance on how to choose the one that fits your product or service.

The mental side of pricing

Most of us step into entrepreneurship carrying invisible baggage around money. For internationals, it often shows up as converting every Danish price into home currency, hesitating because it looks excessive. Yet Denmark is one of the most expensive countries in the world, and if you price as if you were elsewhere, your business will not survive.

Another common fear is rejection. The worry that setting your prices too high will scare customers away, but underpricing does equal damage, since it signals low confidence and makes it harder to raise rates later.

And then there is impostor syndrome, the persistent feeling that you do not have the right to charge at all, even when your work has clear value.

Shifting your mindset means moving away from “what do I think people will pay me?” to “what is the value I create, and what does it cost to deliver it sustainably?”

The market reality in Denmark

Denmark is a small market. Volume is harder to achieve than in larger countries, which means your business model must often rely on higher average prices rather than chasing endless sales. Customers here are used to paying more, whether for food, services, or products, but they also expect quality and reliability in return.

The café in Copenhagen is not competing with a café in your hometown abroad, it is competing with the one across the street. A consultant in Aarhus is not compared with a freelancer overseas, but with local consultants who also charge Danish rates. Pricing is always relative, but the key is to compare yourself to the right market.

Here is a practical tip: write five emails, request five offers from your competitors, and study how you position yourself against them.

Four ways to price your offer

There is no perfect formula, and most businesses use a mix over time, but knowing the four basics helps you set prices with intention.

Cost-plus pricing starts with your real costs: materials, time, overhead, taxes, and adds a margin for profit. It is straightforward and works for products like cakes or crafts, but only if you remember the hidden expenses such as packaging, delivery, or hours spent on admin.

Market-based pricing positions you within the range of your industry. It is especially useful in services where clients can easily compare offers. The danger is treating the “going rate” as a rule rather than a reference, since your costs or added value may require something different.

Value-based pricing focuses on the outcome for the client rather than your input. A cake is not flour and sugar, it is the centrepiece of a celebration. A coaching session is not an hour, it is years of experience condensed into advice that changes a decision. This method is powerful, but it demands confidence, since many entrepreneurs underestimate their own value.

Tiered pricing gives customers choice through different packages or levels. It works well for consultants, freelancers, and digital services, but only if the differences are clear. If tiers overlap too much, customers will simply choose the cheapest option, and you will create extra work for little return.

How to choose the right method

Start with cost-plus to ensure you cover your expenses, use market-based to understand your local positioning, explore value-based to charge for transformation rather than time, and tiered pricing to capture different client groups.

The important part is to be intentional. Do not set prices out of fear or guesswork. Know your numbers, know your market, and above all know your value.