In a small business, the person who sets prices is almost always the same person who handles purchasing, negotiates with suppliers, and steps in when a salesperson calls in sick. A 2023 master's study conducted by Edson Clementino da Silva at FIPECAFI, involving 70 small business managers, quantified this reality: in 82.86% of cases, the owner is responsible for pricing decisions. It's not that other employees aren't interested. It's that pricing has never been treated as a process with clearly defined steps, but rather as a decision someone makes whenever a spreadsheet needs a number.
The problem isn't centralized decision-making. In a small business, it's natural for the owner to set prices. The problem arises when the decision isn't broken down into stages and instead becomes a single action, carried out all at once, without verification. In the same dissertation, the researcher identifies six distinct pricing responsibilities as part of his practical recommendations. They don't require a dedicated department, but they do require someone to fulfill each responsibility at some point. It's worth examining all six before deciding whether your business needs a dedicated pricing function or simply needs to stop skipping steps.
The Six Responsibilities Identified by the Research
As a practical contribution, the dissertation identifies the responsibilities that a pricing function should cover:
Select the pricing objective.
Determine demand.
Estimate costs.
Analyze competitors' costs, prices, and offerings.
Choose a pricing method supported by technology.
Select the final price.
At first glance, the list may seem obvious. Every business does these things in one way or another. The difference between doing them "somehow" and following a structured process lies in how many of these six steps are carried out deliberately and how many are skipped because no one is specifically responsible for them.
In practice, step 3 (estimating costs) almost always happens, and step 6 (setting the final price) always happens. Meanwhile, steps 1, 2, and 4 may never be explicitly addressed because no one is responsible for asking, "What are we trying to achieve with this price?" before starting the calculations.
A Pricing Function Doesn't Mean Creating a New Department
Establishing a dedicated pricing department can make sense for medium-sized businesses with enough products and pricing decisions to justify a full-time specialist. For small businesses, it rarely does.
The responsibilities outlined in the dissertation can, and should, be understood as functions rather than job titles. All six activities need to happen, but they can be distributed among existing employees, with each person handling the step most closely related to their current responsibilities.
This changes the question. Instead of asking, "Do we need to hire someone for pricing?", the better question is: Which of the six steps already have a clearly designated owner, and which are being handled inconsistently, on impulse, without anyone being accountable for them?
Who Is Already Doing What Without Realizing It?
One practical way to distribute these responsibilities in a small business is:
Pricing objective (step 1) — This belongs to whoever defines the business strategy: the owner or the person responsible for commercial strategy. The decision is whether pricing should prioritize sales volume, profit margins, or market positioning. It needs to be made before any calculations, not afterward.
Demand and competition (steps 2 and 4) — These responsibilities belong to the people closest to customers: the sales team. They hear price objections, know what competitors are charging, and recognize when the market might be willing to pay more.
Costs (step 3) — This belongs to the finance team, which already has access to information about direct, indirect, fixed, and variable costs.
Technology-supported pricing method (step 5) — This is the step most likely to be left without a clear owner because it doesn't naturally belong to any single department. Someone needs to decide how prices will be calculated and which tools will be used. That decision affects all three groups mentioned above.
Final price (step 6) — This responsibility returns to the owner, who ultimately assumes the risk associated with the decision.
None of these assignments requires hiring anyone. They simply require assigning a name to each step, even if the same name appears more than once.
The Most Common Missing Piece: A Technology-Supported Pricing Method
The fifth responsibility is the one least likely to emerge naturally in a small business. It's also the one Edson Clementino's research examines in greater depth.
The study tested three pricing decision scenarios with actual business managers: one using only market information, another adding cost and expense data, and a third that also included a calculation and simulation spreadsheet.
The technically correct price in the exercise was R$263.29. The group using the calculation spreadsheet arrived at R$266.22, with a standard deviation of R$3.93, producing the price distribution closest to the correct value among the three groups.
The central finding challenges a common assumption: simply having access to cost information does not, by itself, improve pricing accuracy. What makes the difference is having a calculation tool, whether a spreadsheet or software, that structures the process.
The distinction between markup and profit margin illustrates why this matters.
A product costing R$50 with a 35% markup on cost results in a selling price of R$67.50 (price = cost × (1 + markup)).
The same product, costing R$50 but targeting a 35% margin on the selling price, results in a price of R$76.92 (price = cost ÷ (1 − margin)).
That's a difference of approximately R$9.42 for the same product, based on a seemingly similar pricing intention, simply because a different formula was applied.
Without a tool that makes this distinction explicit, step 5 gets skipped. Someone multiplies or divides mentally, and the resulting price contains an error that may go unnoticed until the product is already on the shelf.
The Burden of Making Pricing Decisions Alone, Without a Process
The research findings help explain why step 5 is often missing: 61.43% of the managers surveyed reported only intermediate familiarity with Excel, and the participants came from 19 different educational backgrounds, with most having no formal education in business administration or finance.
Brazilian academic research on pricing reveals a similar pattern: cost-plus pricing dominates among small businesses, but the formula rarely determines the final price on its own. Other information influences the decision, even when the calculation method doesn't explicitly account for those factors.
The economic importance of these businesses makes this issue particularly relevant.
According to Sebrae data cited in the dissertation, micro and small businesses account for 30% of Brazil's GDP, generate up to R$3 trillion in annual revenue, and provide 78% of the country's jobs.
A systematic pricing error, repeated across product after product, can have a disproportionate impact on the very business segment responsible for supporting most of the country's employment. And the owner, who makes pricing decisions in 82.86% of cases, often does so without the support of the other five steps.
Business owners who can already identify which of the six steps is missing from their routine have a practical starting point in the selling price calculator. Running the calculation makes it clear whether the price currently used by the business was determined through markup or margin, and whether that was a deliberate choice or an unintended result.
For those who want to understand who else, besides the owner, should participate when profit margins are established, it's worth reading Who Should Participate in Margin Decisions at Your Company.
For most small businesses, creating a dedicated pricing department is a disproportionate response to a problem that isn't organizational but procedural.
The six responsibilities identified in the dissertation don't call for a new department. They call for someone to be accountable for each step, even if the same person is responsible for three of them.
What businesses cannot afford is leaving step 5 unassigned. That's the step that transforms the cost and market information a company already has into a reliable calculation process that can consistently produce the correct result.
