Underpricing is the most common and most expensive mistake a first-time founder makes. The urge to "just get some customers" pushes you into free pilots and rock-bottom prices that feel safe today but are almost impossible to raise later. Your first price sets an anchor in the buyer's mind and in your own. This lesson shows you how to set a first price you can defend, take money from your very first deal, and read Indian willingness-to-pay honestly, including the GST and TDS rules that quietly shape what you actually keep.
Charge from day one
A free user is not validation. The only real proof that you have solved a painful problem is that someone paid you to solve it. Money also changes the relationship in your favour: paying customers give sharper feedback, show up to calls, and tell you what truly matters instead of being polite. So even a small paid pilot beats a large free one.
- Raise a proper invoice for your first deal, and collect through UPI, bank transfer, or a payment gateway. Getting paid once builds the muscle you will use hundreds of times.
- Replace "free trial forever" with a paid pilot that has a fixed scope, a fixed fee, and an end date. A defined pilot forces a real decision at the end.
Set a price that does not trap you
Price on the value you create, not on the hours you spend. Anchor to what the problem costs the buyer: time saved, revenue gained, or cost avoided. Your cost is your floor, never your ceiling.
- Start higher than feels comfortable. You can always offer a discount, but raising a price later is painful and often loses the customer.
- Keep the structure simple. One clear plan, or a short ladder of two to three options, not five confusing tiers.
- Discount with a reason and a deadline. Publish a real list price, then give an explicit "founding customer" rate for a limited time. This keeps the full price anchored so the discount reads as a favour, not your true value.
India willingness-to-pay realities
Indian B2B buyers are genuinely price-sensitive and negotiate hard, so expect procurement pushback and requests for annual discounts. Decision cycles run longer, and the person who feels the pain is often not the person who controls the budget, so you may need to sell to both. Annual prepaid contracts are common and are worth encouraging, because they improve your cash flow and reduce churn. Finally, do not confuse "your price is too high" with "I do not yet see the value." Very often it is the second problem wearing the mask of the first, and the fix is a clearer demonstration of outcomes, not a lower number.
The tax facts that shape your price
Three India-specific rules directly affect what you quote and what you keep. Treat these as a starting map and confirm specifics with a chartered accountant.
- GST registration threshold. For services, registration generally becomes mandatory once aggregate turnover crosses ₹20 lakh a year (₹10 lakh in special category states); for goods the limit is ₹40 lakh. Below the threshold you usually need not register, so you do not add GST. Note that some situations, such as interstate supply of goods, require registration regardless of turnover.
- GST rate once registered. Software and IT services, including SaaS, attract 18% GST. This rate stayed at 18% even after the GST 2.0 reform effective 22 September 2025, which simplified slabs to 5%, 18%, and 40%. Always quote as "price plus GST" so the tax does not eat your margin. If you sell to clients outside India, export of services is zero-rated when you file a Letter of Undertaking (LUT).
- TDS on your invoices. Indian business clients deduct tax at source on professional fees, currently 10% (2% for technical services), once payments to you cross ₹50,000 in a financial year (the threshold was raised to ₹50,000 from 1 April 2025). This money is not lost: it is credited against your own income tax. So never inflate your price to "cover" TDS. It is your money, simply parked with the government until you claim it.
Set a real price, take payment from the first deal, and let the tax rules inform your quote rather than scare you into charging nothing. A paying customer at a fair price teaches you more in a week than a hundred free users will in a year.