how to price a job
How to Price a Job: Labour, Materials and Markup Done Right
Pricing a job properly is the bit that makes or breaks you as a tradesperson, and yet it's the part nobody really teaches you. You learn the trade, you get your tickets, and then you're out there on your own trying to work out what to charge. Get it wrong low and you work yourself into the ground for nothing. Get it wrong high and the phone stops ringing.
So here's the method I've settled on over the years. It's not complicated, but it is thorough, and that's the point. Price every job the same careful way and you stop guessing.
Start with labour, and be honest about hours
First thing is your labour. Most of us work off either a day rate or an hourly rate. Whichever you use, the real skill is being honest about how many hours a job actually takes, not how many you wish it took.
Here's the bit people skimp on. A job isn't just the time on the tools. It's the trip to the wholesaler, the parking, the cleaning up, the conversation with the customer about where they want the spots. If you only count the screwdriver time, you're working a chunk of every day for free. Count the lot.
- Decide your rate honestly, covering your skill, your insurance and your time
- Work out realistic hours including travel, fetching materials and clearing up
- If you're using a day rate, don't pretend a job is half a day when you know it's most of one
- Add a bit for the fiddly jobs that always take longer than they look
Price materials with a sensible markup
Next, materials. Add up everything the job needs, cable, accessories, fixings, the consumables you never think about until you're out of them. Then, and this is important, put a markup on top. You are not a charity supplying goods at cost.
A markup on materials is completely standard and it's there for good reason. You're the one fronting the cash, driving to fetch it, carrying the risk if something's faulty, and sorting the returns. To my mind a sensible markup of, say, ten to twenty percent is fair for that effort, though you'll find your own number depending on your trade and your suppliers. Keep that figure as an illustration, mind, not gospel.
Don't forget overheads and travel
This is the silent killer of small trade businesses. All the costs that don't belong to one single job still have to be paid by the jobs you do. Your van, your fuel, your tools, your insurance, your phone, your accountant, your professional body fees, the lot.
Add those yearly costs up, divide by the number of days you realistically work, and you've got a daily overhead figure that needs covering before you've made a penny. Build a slice of that into every job. Travel's part of this too. A job an hour away costs you more than one round the corner, and there's no shame in reflecting that in the price.
- Van, fuel, servicing and that ever-present tax
- Tools, replacements and calibration
- Insurance, certification scheme fees and your accountant
- Phone, software and admin time you'll never bill directly
Add contingency, then build in actual profit
Right, two more layers and you're done. First, contingency. On anything with unknowns, especially older properties, add a sensible buffer for the surprises that always turn up once you start. It's not padding, it's realism.
Then, and this is the one people forget, profit. Covering your costs is not the same as making money. Your labour rate pays you a wage for the day. Profit is what's left over to grow the business, weather a quiet month, or just have a bit of breathing room. A business that only ever breaks even is one bad week from trouble.
So the full stack looks like this: labour, plus materials with markup, plus a share of overheads and travel, plus contingency, plus profit on top. Add those honestly and you've got a price that actually works for you, not just one that wins the job.
It's a fair bit to juggle on every single job, which is why I run mine through Quotato now rather than redoing the sums on a notepad each time. However you do it though, work through every layer properly and you'll quote with confidence. Underprice out of nerves and you'll regret it by Friday, no two ways about it. Price it proper and stand by it. Give us a shout if you want me to walk through a real example sometime.