Segment:- Price It Right or Lose: Why 90% of African Businesses Fail at Pricing Strategy.

Summary

Konnected Minds Podcast – Episode Summary

Episode Title:
Price It Right or Lose: Why 90% of African Businesses Fail at Pricing Strategy

Host: Derrick Abaitey
Guests: Business Coach; Entrepreneur
Date: November 9, 2025

---

Episode Overview

This episode zeroes in on a critical, often-misunderstood pillar of business success in Africa: pricing strategy. Derrick Abaitey and his guests debunk the myths and fears surrounding pricing, drawing deeply on personal experience and practical examples. The aim is to empower ambitious entrepreneurs—especially younger Africans fresh from national service—to shed limiting beliefs, build confidence, and master the art of profitable, sustainable pricing in business.

---

Key Discussion Points & Insights

1. The Fear Behind Pricing Decisions (00:00 – 01:30)

• Afraid to Price Up: Many African entrepreneurs undervalue their offerings, fearing that raising prices will drive away customers.
  • Quote (Business Coach, 00:05):
    "People are afraid. They are afraid that once they increase their prices, they are going to lose customers. But you are not having enough customers anyway. You might as well just price right and then use the margins... to attract the kind of customers that you want."

2. Understanding Your Target Market (00:32 – 01:44)

• Misaligned Pricing = Failure: Pricing should be rooted in a clear understanding of your business model and your target audience—not just undercutting the competition.
• Business Coach’s Analogy:
  • Selling a Makola product to a Chasaku customer while pricing for neither.
  • Quote (Business Coach, 01:10):
    "You can't have middle to low income earners as your target market and then your pricing is all the way up."

3. Competitive vs. Low Pricing (01:44 – 03:15)

• Competitive ≠ Cheap: Many conflate low pricing with competitiveness; true competitiveness comes from offering value that matches and justifies the price.
• Value Addition Example: “Glam Inches” business uses premium pricing, justifying it through exclusive benefits (glam card, community, tutorials, personal attention).
  • Quote (Business Coach, 02:07):
    "Our prices may be higher, but they are competitive because we add a lot of value to the price."
  • Memorable Moment: Discussion of customers feeling “special” because of the glam card, community, and personalized support.

4. Practical Pricing Methods (03:15 – 04:53)

• Business Coach’s Method:
  • Start with vendor costs (Excel or similar)
  • Account for all expenses: shipping, packaging, overheads
  • Factor in the value of your own time (consider market salary equivalent)
  • Study competition, define desired profit margin
• Quote (Business Coach, 03:58):
  "Some people struggle with that, the profit they want to make. Sometimes I ask them to value their time—if you were working for a company, how much would they be paying you for a month?"
• Entrepreneur’s Method:
  • Emphasizes profit and independence from competition’s prices.
  • Works backwards from desired profit, not just costs.
  • Avoids becoming a “commodity” by differentiating and aiming for premium positioning.
  • Quote (Entrepreneur, 05:06):
    "If I look at competitors... I become like a commodity. But when I price at my own price, looking at my time, what I’ve put into it, the efforts, everything… then I do that."

5. The Profit and Impact Balance (04:53 – 06:53)

• Profit is Essential: Even for mission-driven businesses, lack of profit leads to frustration.
  • Quote (Entrepreneur, 04:57):
    "Impact without profit is frustration."
• Optimize for Profit: Set income goals, calculate expenses, price accordingly. Don’t let external price wars define your value.

6. Advice to Young African Entrepreneurs (06:53 – 09:35)

• Jobless Graduates Have Opportunity: With 100,000+ young Ghanaians finishing national service yearly, entrepreneurship is a viable path for many.
• Leverage Your Time (Business Coach, 07:29):
  • Use post-graduation time to learn, volunteer, network, and build personal brand.
  • Quote (Business Coach, 07:36):
    "So they have time. Use your time, get to know people, make yourself valuable... you have time. So right now, after national service, all you have is time. So just make sure you make the most out of that time."
• Set Goals, Seek Exposure (Entrepreneur, 08:51):
  • Self-assessment: define life goals
  • Get exposed to pros/cons of traditional employment vs. business
  • Recognize diverse business models beyond brick-and-mortar
  • Quote (Entrepreneur, 09:01):
    "Most people don't have goals and so they have little aspirations... Number one, you need to be exposed to different things—the pros of a job and the cons, the pros and cons of business."

---

Notable Quotes & Memorable Moments

• On Underselling:
  "You might as well just price right and use the margins you are making to attract the kind of customers you want."
  — Business Coach (00:11)

• On Value-Based Pricing:
  "You’re not just looking at the number, you’re offering value, added value to the price."
  — Business Coach (02:03)

• On Impact vs. Profit:
  "Impact without profit is frustration."
  — Entrepreneur (04:57)

• On Entrepreneurship Mindset:
  "I don’t look at other people’s things, otherwise I become a commodity. I want to be premium, I want to be a person of my own."
  — Entrepreneur (05:19)

• On Seizing Opportunity:
  "After national service, all you have is time. So just make sure you make the most out of that time."
  — Business Coach (07:52)

---

Key Timestamps

• 00:00 – 01:30: The core fear driving bad pricing (Business Coach, Interviewer)
• 01:45 – 03:15: Deep dive into competitive vs. low-value pricing (Business Coach)
• 03:18 – 04:53: Step-by-step: pricing methods revealed (Business Coach, Entrepreneur)
• 04:53 – 06:53: Balancing profit and impact; avoiding the commodity trap (Entrepreneur)
• 06:53 – 09:35: Advice for national service graduates on entrepreneurship, personal growth (Interviewer, Business Coach, Entrepreneur)

---

Final Takeaways

• Pricing is not about being the cheapest; it’s about sustainable value and a clear sense of your worth.
• Entrepreneurs must deeply understand their market, costs, and personal goals before setting prices.
• Young Africans—especially those fresh from university—should fearlessly explore entrepreneurship, leveraging time, learning, and networking.
• Without profit, even the most passionate mission collapses; pricing right is non-negotiable for business survival.

The right price invites the right customer, fuels growth, and ensures you don’t just survive, but thrive.

Transcript

[Business Coach]

Okay.

[Interviewer]

Is it because business owners don't know how to price? How do we price?

[Business Coach]

I think we are afraid. What's the common pattern? I have seen in my coaching experiences, people are afraid. They are afraid that once they increase their prices they are going to lose customers. But you are not having customers, enough customers anyway. You might as well just price right and then use the margins you are making use the margins, you are making leverage on those margins to attract the kind of customers that you want.

[Interviewer]

Okay, what is price? Right?

[Business Coach]

Okay.

[Interviewer]

I'm just starting out in business. How do I.

[Business Coach]

Okay. So I know a lot of the time when we, when we are starting businesses, we would just look at what other people are pricing and then make us lesser than this. But then that doesn't always work. First of all, you need to understand your business model. Who is your target audience? If you don't understand that you are never going to get your pricing rights because you can't have middle to low income earnest as your target market. And then your pricing is all the way up. And then when I say target market it means like he said, it's a conversation. You marketing to your audience is a conversation. So when you are market marketing to them and they are speaking back to you, so you realize you are marketing to middle income earners like you are in Makola. You're trying to sell something. You are selling ringing bells. But then you are trying to price something for somebody in Chasaku. But then you are marketing it at Makola. Right? So you need to understand who your target market is first of all. And then of course you need to steady. Once you understand your target market, you need to study your competition because you want to make sure you have competitive prices. Not low prices, but competitive prices.

[Interviewer]

What's the difference?

[Business Coach]

Yes, because people think low prices means competitive prices. But it's not because people. Okay, let me just use my business as an example. Yes. Glaminanches. I would say at the moment we do have high prices or like we do have premium pricing. Right? And you may wonder why we do have premium prices. It's because of the value that I want to give our target clients. Right? Because in Glamine inches we want people to feel confident and look confident when they wear your hair, right? So in their minds, this hair because of the price point and because of how she speaks to me when she markets the hair, when I wear the hair, I have some kind of feeling like I feel like okay, I am wearing glam in inches. And then when we do that, we Also, we have something called the glam card. So when you buy hair above a certain amount, you have the glam card, which makes you feel special, makes you feel like you are part of the community. We offer tutorials, we will send you messages, we'll call you. So in that case, we offer value. So that is competitive pricing, right? Because you're not just looking at the number, you're offering value, added value to the price. Unlike other people who may just be pricing low and then just throwing the product on the clients come and buy, come and buy, without really giving any sense of belonging, any sense of value. Right. So in that case, our prices may be higher, but they are competitive because we add a lot of value to the price.

[Interviewer]

What method do you use to price your hair products?

[Business Coach]

Okay, yes. So this actually in. It's a lot. It's a question. I get a lot, right? So I do have a system where I. For hair products, I have a number of vendors, so I just have an Excel sheet with the vendor cost prices. I know it sounds kind of a cake, but then the vendor cost prices and I have an average of them. And. And then I use that as my cost price. And then I. So now you need to look at your expenses, right? So initially your cost price, your expenses, and then the profit you want to make. So some people struggle with that, the profit they want to make. So sometimes I ask them to value their time. If you were working for a company, how much would they be paying you for a month? Like, how much do you think you would deserve to be paid for a month? And then find your hourly pay. And then look at the amount of time you spend marketing or working on that business, that becomes your hourly. Right. And that is what you want to earn and then some. So first you need to look at the cost price, the base cost price with shipping, packaging and everything. And then you look at your expenses, your overhead costs, everything you spend to run the business, trash collection, light, water, everything you spend to run the business needs to be recorded. And then you look at, you value your time value your time as well. And then you add some based on. After studying your competition, after looking at your business model and who you want to serve. Yes. So that's how you price in your business.

[Interviewer]

What's your method of pricing?

[Entrepreneur]

Exactly this, almost the same thing. But for me, what I want to do is that I. Because business is for profit, I just want to just jump that, not just running a business, just because it's a business. Okay, you are trying to make profit, you Are trying to do something we know you're trying to. Some people also want to impact but you still want to make profit. Otherwise impact without profit is frustration. And so you need to first of all optimize your business for profit. And so for me, I always try to put 100% mark on whatever I'm trying to do. So I look at my expenses, I then look at that. For me, I don't look at competitors. Why? Because I feel like they'll influence my pricing and what I become like a commodity, right? Yes, because when I, when, for example, if I. The thing about. If I was going to buy, for example this marker and this marker was one CD and somebody else then sees another marker at 80 pesos all of a sudden just because probably I looked at this and decided to price, this guy looked at my product and size price at 80%. Somebody came just buy the 80 pesos one because it's cheaper because now it's just like a commodity. But when I don't look at anybody's thing and I price at my own price, looking at my time, what I've put into it, the efforts, everything. And I determine that, okay, this is what I want to make, then I do that. So I don't try, I don't, I don't look at other people's things otherwise I become a commodity. I want to be premium, I want to be a person of my own. I want to optimize the business for myself, for what I'm doing. And so I want to look at my expenses, I take account of my expenses. Everything that is going to, is going. What is going on? The teammates, the people who are helping us do the business, the people who are everything, everything when it comes to the, the business. And so I look at that expense, I look at the profit that we want to make. So I work end from the beginning, not beginning to end. I determine, okay, let's say this month we want to make 100,000 Ghana cities. If we want to make a hundred thousand Ghana cities and we know our expenses are this, that means that we need to price this way otherwise we are not going to reach this thing. And so the moment you work beginning to the end, not end to the beginning, going to be in trouble.

[Interviewer]

Today There are over 50,000 young Ghan who have just finished their national services.

[Entrepreneur]

Yeah, majority of them are actually over 100,000.

[Interviewer]

Well, there you go. Majority of these people are looking for jobs. But I am a big believer that even if less than a quarter of those numbers started their own businesses, they can employ half of those people.

[Entrepreneur]

Yeah.

[Interviewer]

In the next five to 10 years. What do you think the young person has just come out of their national services. What can they do as far as entrepreneurship and business is concerned?

[Business Coach]

Yeah. So I think they need to leverage their time. They have all the time on their hands, which is more than a lot of us. Honestly, sometimes I wish I had a lot more time. Like as I. I wish I had the time I had when I finished my national service, because I know you can, you can even attest to it. You are so busy now, Derek. Right. And you wish you had more time. Yes. So this is the time to understudy. Understudy people. I'm very sure if you reach out to Pakwesi, like, even though he may not directly respond to you, you can, you can reach out to him, attend some of his free events, like make yourself visible to him. Right. You have a lot of. A number of volunteers here as well. I don't know why people don't volunteer enough or things like this. So they have time. Use your time, get to know people, make yourself valuable. Right. And then you get to learn soft skills. So that's. If you want to, you don't want to go directly into trading and stuff, you make yourself valuable. Personal branding. Start something online. People are making so much money by just sharing recipes for simple things that they eat at home and is doing so well. So you have time. So right now, after national service, all you have is time. So just make sure you make the most out of that time. And honestly, what do you think?

[Entrepreneur]

So, so this is what I'll say. You're just coming out from national service. I think everybody first of all needs to determine what their goals are going to be in life. If you don't have that straight, you're going to be very confused.

[Business Coach]

Okay.

[Entrepreneur]

Because there's some people who know that they want to work as an engineer. There's people who, they have different goals. Most people don't have goals and so they have little aspirations and so they are not able to move up to that. But this is what I'll tell somebody. Number one, you need to be exposed to different things. Need to be exposed to the pros of a job and the cons of a job. You need to be. To be able to be exposed to the pros of a business and the cons of the business. Not only that, you need to understand the different types of businesses. I think when people think about businesses, they only think about probably just a brick and mortar structure, but now it's a different world. It's a different ball game. There are different things that people can do to make money.

[Business Coach]

Connected Minds podcast.