Price Floor

The minimum price at which a product or service can be profitably sold, set by the sum of all variable costs plus an acceptable minimum contribution toward fixed costs.

Pricing below the floor destroys value with every sale. Every founder must know her price floor before entering any negotiation or running any promotion, so she never inadvertently prices herself into unprofitability.

A founder calculates that each coaching session costs her £25 in platform fees, payment processing, and direct preparation time. Her price floor is £25 per session. Any promotional pricing must stay above this, and her full rate must cover the floor plus all overhead and profit margin.