Segment- Your Pricing Is Killing Your Business: Don't Price to Please Customers.

Summary

Konnected Minds Podcast
Host: Derrick Abaitey
Episode: Your Pricing Is Killing Your Business: Don't Price to Please Customers
Date: December 16, 2025

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Episode Overview

This episode explores the critical impact of pricing strategies on business survival and growth, particularly in product-based ventures. The guest (A) shares hard-earned lessons from personal business setbacks, offering actionable insights for entrepreneurs on structuring their businesses, calculating costs, and setting prices driven by sustainable goals—not just customer satisfaction. The tone throughout is candid, pragmatic, and supportive, with a strong focus on the realities of entrepreneurship.

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Key Discussion Points & Insights

1. Lessons from Failure and the Importance of Structure

• The guest (A) recounts a pivotal story: after a serious business conflict, even involving police, they learned how crucial contractual agreements and business structure are—now, everyone in the company has contracts, even the cleaner.
  • Notable Quote:
    • “Right now, even the basic cleaner in my company…is working under contract and it has really saved me and has given me the best peace I could ever imagine in business.” (00:17)
• Early entrepreneurship mistakes included expanding branches without sufficient planning, misunderstanding the need for different strategies in new environments, and lacking a business structure beyond sole proprietorship.
  • “I failed because… young guy, you’re working, money is coming… I didn’t really misuse my money, but I misappropriated my money.” (00:49)
  • “Disloyalty broke the branches. It couldn’t survive the first year… you have to read the environment, you have to see what they buy into, the psychology of the buyers.” (01:16)
• The takeaway: Success isn’t always transferable—what works in one location may not work in another without considering local dynamics and having scalable systems.

2. Rebranding & Building for Growth

• After setbacks, the guest transitioned from sole proprietorship to a limited liability structure, rebranded the business, and found new success.
• Proper systems led to confidence in expansion:
  • “So out of my experience and the lesson I’ve learned, I was able to apply the best structure and system to help me with the branch… It gives me the idea or the open mindedness to do more.” (03:27)
• Opened a manual factory—automation is minimal—signaling growth built on solid foundations.

3. Realities of Entrepreneurship & Encouragement

• Host Derrick Abaitey gives heartfelt praise for the guest’s self-made progress, particularly for someone who didn’t attend university:
  • “For someone who did not finish university, didn’t even start, you’ve done fantastic for yourself… I’m proud of you.” (04:22–04:34)

4. Product Pricing – From Costing to Strategic Thinking

• The core of the episode: step-by-step breakdown of how to cost, price, and plan for selling a product (using plantain chips as a practical example).
• Key formula for pricing:
  • “Pricing is a total amount of cost plus your expected profit, plus your future plan. And that will give you your pricing.” (05:47)
• Elements to consider:
  • Raw materials (e.g., plantain, oil, packaging)
  • Operational expenses (labor, utilities, administrative costs)
  • Waste and spoilage
  • Desired profit margin
  • Future expansion savings ("future plan")
  • Logistics costs
• Example calculation:
  • Total production cost for 20 packets is 70 Cedis, yielding a base unit cost (approx. 3.5 cedis per pack). Add profit, logistics, and reach a final price (e.g., 5 cedis per pack) that covers all bases.

The Trap of Pricing to Please

• Many young entrepreneurs set prices to compete or to please customers, neglecting sustainability:
  • “A lot of young entrepreneurs make a lot of errors. They look at the competitiveness of the market. They also consider their customers' emotions and… think for the customers: how am I going to please the customer?” (08:31)
• Dangers:
  • Ignoring supply volatility (e.g., plantain prices jump 500-600% out of season)
  • Squeezing margins until the business can’t even break even, despite high sales volume
  • Not saving for future investments or emergencies

Practical Advice

• Always factor in future plans and unpredictable costs in your pricing, not just present expenses.

• Don’t be afraid to raise prices to ensure business survival—in the long run, underpricing harms both business and customers.

• Real-life example: When plantain prices spiked, the guest kept prices low to avoid losing customers, but lost money for a time. A more balanced, strategic approach is needed.

  • “Sometimes you think you are making profit, and it goes to a time, not be even breaking even. And this has happened to me before… Even at that 90 cedis [cost], I was still not breaking even.” (10:46)
  • “You have to be very strategic and be very, very thoughtful of your pricing. Have the future plan attached to the pricing so that you get to the future with no regrets.” (11:48)

5. Managing Price Fluctuations

• The host asks how startups should handle raw material price swings. The guest begins to share insights before the segment ends (12:05).

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Notable Quotes & Memorable Moments

• On learning from business conflict and legal trouble:
  “Why? Why not? God is blessing me. Why don't I also be a blessing to my sister?... Absolutely not. Why? I've learned my biggest lesson. Like, this issue was like a matter of life and death... Even the basic cleaner in my company right now is working on their contract and it has really saved me and has given me the best peace…” (00:00–00:17)
• On the pitfalls of attempting to expand too rapidly:
  “You can't just start something at one particular place and be successful and you can apply the same method to another place to think you become more successful there. No, you have to read the environment, you have to see what they buy into, the psychology of the buyers and all that comes in place.” (01:19)
• On pricing mistakes:
  “Most of the time [entrepreneurs] think for the customers, how am I going to please the customer? How am I sure that if I sell it to this particular amount of pricing, they will buy a lot? We are looking at moving numbers, we are looking at moving products rather than considering the future of the business.” (08:35)
• On ignoring raw material volatility:
  “Plantain price fluctuates... It gets overly expensive, it gets to over 500 to 600% of the original price… Sometimes you think you are making profit, and it goes to a time, not be even breaking even.” (09:27, 10:46)
• On business survival:
  “You have to be very strategic and be very, very thoughtful of your pricing. Have the future plan attached to the pricing so that you get to the future with no regrets.” (11:48)

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Timestamps for Important Segments

• 00:00–00:20 – Lessons from a business crisis and the importance of contracts
• 00:32–02:50 – Early failures, challenges of growth, and the value of business structure
• 03:27–04:18 – Using experience to systematize and expand successfully
• 04:22–04:35 – Host’s commendation, guest’s educational background
• 05:47–10:00 – Step-by-step breakdown of product costing and pricing
• 08:31–11:48 – Dangers of pricing to please customers, the importance of long-term thinking
• 11:59–12:08 – The challenge of managing price fluctuations (set-up for further advice)

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Tone

The conversation is open, honest, and mentorship-driven, blending tough love with encouragement. Both the host and guest speak directly to young, ambitious entrepreneurs, emphasizing hard-learned truths, practical strategies, and the necessity of self-belief and adaptability.

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Summary Takeaways

• Structure and legal protections are vital as businesses grow.
• Expansion requires more than copying a successful formula—it demands adaptation.
• Pricing is not just cost plus profit; it must include strategic, long-term thinking and margin for volatility.
• Underpricing to “please customers” can destroy your business; sustainability must come first.
• Always account for market realities, not just current costs.

This episode is a must-listen for anyone starting or scaling a product-based business, especially those operating in volatile markets.

Transcript

[A]

Why? Why not? God is blessing me. Why don't I also be a blessing to my sister?

[B]

Would you do that again?

[A]

Absolutely not. Why? I've learned my biggest lesson. Like this issue was like a matter of life and death. I wouldn't lie to you. She had to even send land cars to come and attack me. We ended up in the police station and then everything was resolved and I learned my biggest lesson right now. Even the basic cleaner in my company right now is working on their contract and it has really saved me and has given me the best piece I could ever imagine in business.

[B]

So what's there? Your failure story?

[A]

Thank you for that question because I have a lot, I've been through a lot and I've experienced a lot and that is what has really developed me to become who I am today. I wouldn't touch much, but I want to talk about my. My failure and not really planning well, as I mentioned earlier, I just wanted to start a business to survive and then have some cash flow to. To support me with my education. But as I started the business and then in the process of the business I realized no, this is actually not a survival business, but it is a generational business. I can really make a whole generation out of this. So the first thing I needed to do was to have a structure and have a better business plan back then earlier. But I failed because you know, young guy, you're working, money is coming so you feel like you can do everything with your money. I didn't really misuse my money, but I misappropriated my money. So what I did was at first I wanted to open branches because McPherson is selling in silicon. So I wanted to venture into other communities to sell planting chips, which I successfully did. I opened the branches but disloyalty broke the branches. It couldn't survive the first year so I had to close it back and then come back to East Leon. And that was when I learned my biggest lesson that you can't just start something at one particular place and be successful and you can apply the same method to another place to think you become more successful there. No, you have to read the environment, you have to see what they buy into, the psychology of the buyers and all that comes in place. That was one thing I failed. I was thinking because I've been able to build a brand somewhere, I can just translate the same brand or transfer the same image to the other location to do the. And that was where I failed. And also there wasn't a good structure in my business back then. So you know, back then I was just a sole proprietor. I was running and controlling everything by myself. So there wasn't any structure that if boss is not here, this and that and that is the flow we need to follow. And that really broke the two branches and I needed to come back to factory reset to continue building myself. Yeah. So I failed. But I learned my lesson and then it gave me a second thought. So what can you do to still meet Ghanaians beyond East Lagoon? And that is how. That is where the rebranding of MacPhilix all started from. So from sole proprietor we had to move to limited liability and rebranded the brand and then push.

[B]

Let me stop you here for a minute. We are on the journey of changing the minds and the lives of people. So if you haven't subscribed and become part of the family, please hit the subscribe button and turn on the notification. Thank you. Now let's carry on with the conversation, but I mean you've done well with the second branch. You have where I met you, we had a brief chat. You've done well with it. I mean, I mean I know it's still in East Lagoon, but how have you been able to succeed with that compared to the other branches you opened that failed?

[A]

Okay, so success comes from your experience and also what you've learned. So out of my experience and the lesson I've learned, I was able to apply the best structure and system to help me with the branch. And then I wouldn't lie to you, after opening the branch, it gives me the idea or the, the, the open mindedness to do more because right after the branch was when I opened my, my factory. And it's a fully working factory now with a lot of stuff because it's not an automated factory. We are working manual out there. The automation is just like 10%. And you can just imagine out of my experience and what I had to learn because I have to go back to their books and then learn from the expert to do what is right. And I had a lot of advices from people as well that really shaping my understanding to business and my understanding to the direction I was going to.

[B]

For someone who did not finish university, didn't even start, you've done fantastic for yourself.

[A]

Thank you.

[B]

I must say if you haven't heard this from somebody who is not a family member before, Charlie, I'm proud of you.

[A]

Thank you.

[B]

That's a great job.

[A]

Thank you.

[B]

I'm gonna ask a favor of you in the next few minutes. So I'm gonna get your Some products here.

[A]

Okay.

[B]

And don't think of it as your product. Think of it as education for somebody starting a business and how to sell the product, monetize that product and push the product. Right. It could be anybody. It could be anything. It could be any product.

[A]

Okay.

[B]

But unfortunately or fortunately, I have you here. So I'm gonna show you a set of products too. Right.

[A]

Okay.

[B]

Awesome.

[A]

Thank you. Fantastic.

[B]

So these are two products I have.

[A]

Okay.

[B]

And. Oh, yeah, it happened to be my favorites as well. So this I've seen in traffic. Yes. And a lot of, you know, women selling this. And this is usually what I would buy. I usually get this from your. One of your branches in East Lagoon when I'm driving out as a company. Which one did you start with?

[A]

I started with the tide ones.

[B]

Okay.

[A]

And then we evolved to this, and then we introduced this one.

[B]

So this is your latest product. Okay. So very quickly, for someone who is trying to start a product business and not a service business, what would be your plan to cost this product? How do you do it or how should the person do it?

[A]

So pricing, right? That is where pricing comes in. So pricing is a total amount of cost plus your expected profit, plus your future plan. And that will give you your pricing. So this is a planting chips. And the basic raw materials are planting oil, salt, and then foil. And then there are other hidden expenses that you also have to consider. That is the expenditure, operational expenses. You also have to consider the operational expenses, which is a human factor. If you're using labor. You also have to consider waste because sometimes the planting. Some of the portion of the planting will will over fry. It will. It will darken, it will not be up to standard. They are waste. And then there'll be. There'll be other components that also will cost to the costing, will value to the costing. So you need to consider all those value to your costing. So let's say I had this plantain. I went to the market and bought 10 cities worth of planting. I bought all your 10 cities. I bought four 10 cities. I bought packaging 10 cities, making 40 cities. I have fried the plantain. And then I've gotten like, let's say 20 packs of plantain, right? Chips. So right now I have to consider every component that I added together or I brought together to have these 20 suchet of planting chips. They are total cost. So from the oil to the gas, and I know definitely there'll be a bit of oil left and stuff. So you have to consider the value of oil left behind, subtract it from the main cost, meaning the main cost will go a bit down outside that. Then you also have to add in. If it's a shop you are using or a working space you are using, consider the utilities there because you'll be using light and stuff, you have to consider those utilities there. If you are operating under administration, you have to consider administrational cost. And then you also add your expected profit. So the expected profit that bounds to you how you want to, how much you want to get, how much you want to achieve after selling the product. So if it's, if it's a value of 10% or 20%, you just add considering how much you want to make out of the product. So you add that. And then don't forget there's a future plan of what you are doing. Okay? So if you are adding your expected profit margins, then make sure that those margins are a bit substantial enough so that when you even spend some, there'll be some savings for the expansion of the product. So you bring all together and then you, so you bring all together and then let's say with the operational cost alone, maybe let's end up, let's cap it at 70 cities. Okay, so you spend 70 cities of producing this 20, such as of planting. That means you say you, you divide the, the 20 by 70, you get about 3.5 cities or something of one package. So out of the 3.5, then you add your profit expectation. Let's say you are expecting 10 cities of profit, 1 city of profit making 4 cities 50 pesos. And then you consider, let's say, logistics and stuff and how to get into the shop. And the shop, we are selling everything. You add your five pesos to it, giving you your 50, sorry, five cities to it, and then it's giving you a value of five cities per pack. So when you sell this five cities per pack, you are covered with every, every margins. You're expecting to get out of the planting. And then your business is good to, to scale up. But sometimes when it comes to pricing, a lot of young entrepreneurs make a lot of errors. They look at the competitiveness of the market. They also consider their customers emotions and they most of the time think for the customers, how am I going to please the customer? How am I sure that if I sell it to this particular amount of pricing, they will buy a lot. We are looking at moving numbers, we are looking at moving products rather than considering the future of the business. That is where a lot of entrepreneurs feel. And most importantly, with this plantain product, you know, planting Price fluctuates. It doesn't have a fixed price as a raw materials. You go to the market, you have it at a particular amount when it's in season. And when it goes out of season, it gets overly expensive. It's so ambiguous. Like it gets overly expensive, it gets to over 500 to 600% of the original price. And this is a product that you are compelled to still sell to your customers at a competitive or so that's a persuasive pricing. So when it comes to some products, when you are pricing, you have to consider that underlying factor, consistency and most of the times the fluctuation of the pricing. So if you don't consider the consistency or the fluctuation of the of the raw materials you sometimes sell, sometimes you think you are making profit. And it goes to a time not be even breaking even. And this has happened to me before. I've had a couple of experiences to that before. Even recently, if you can recall this year, planting really went out of season. It was extremely expensive. And I was considering my customers because from, from a particular price, from I think we were selling this around 70. And then all of a sudden it has to be, shoot, 280, 90 cities. And even at that 90 cities, I'll tell you me that I was still not breaking even. Wow. But I still have to maintain because if I don't take care, I might lose my customers. And then we're planting card marketing season. Who I come to, who and who is coming to buy my plantain chips? And that was what I considered. I wouldn't lie to you, I lost a lot. But to me it's not a loss because I've been in the business for years and I know the dynamics of how I maintain my pricing because I sell plantain chips. I have other products that support my plantain. But what about the regular or the basic entrepreneur that just started business and they want to survive to extend to 10 years? You have to be very strategic and be very, very thoughtful of your pricing. Have the future plan attached to the pricing so that you get to the future with no regrets.

[B]

But as a business, how do you manage the fluctuations in prices? Say I'm starting a business.

[A]

Okay.

[B]

How would you advise me to manage that?

[A]

Yes. Connected minds podc.