how to price a job
How to Price a Job: Labour, Materials and Markup
Pricing by gut feel and hoping it covers you? That is how good tradesmen go broke busy. Every job needs the same three things costed: labour, materials, and a markup that pays for everything the customer never sees.
Get those three right and you make money on every job, not just the easy ones. Guess them and you end up working sixty hours a week to break even.
The three numbers behind every price
Pricing is not a dark art. It is three numbers added together, then a margin on top. Most underpricing comes from missing one of them or forgetting the overheads.
Labour
Work out your day rate honestly. Take the wage you actually want, add holiday, sick days and the days you spend quoting and chasing money. You bill maybe 5 days but get paid for far fewer, so your rate has to carry the gaps.
Materials
- Price the actual materials, not a rough memory of last time.
- Add waste: 10 percent is sensible on most jobs, more on tiling and timber.
- Add a markup on materials too. You source it, store it, cart it and warranty it. That is worth money.
Markup and margin
Markup covers your overheads: van, fuel, tools, insurance, phone, accountant, and the profit you are actually in business for. Without it you are running a charity with a transit.
The pricing formula to live by
Run every job through this before you send a number. It is the difference between busy and profitable.
A quick worked example. Say materials are 400, so with 20 percent markup that is 480. Two days labour at a 250 day rate is 500. Add 100 overheads and a 15 percent profit margin on the lot.
Round up, never down. Price for the day it goes wrong, not the day it goes perfect, because one job in five always does.
Where new tradies get this wrong
- Setting the day rate at what they used to earn employed. Self-employed, that wage has to cover holiday, downtime, tools and the taxman.
- Forgetting overheads completely. Van, insurance and fuel are real costs on every job, even when you cannot see them on the invoice.
- Confusing markup with margin and ending up with thinner profit than they think.
The fix is not charging more for the sake of it. It is costing the whole job so the price reflects what it actually takes to deliver it.
Let the maths do itself
Doing this on paper for every quote is slow and easy to fluff. Quotato has the markup and profit-margin calculation built in. You put in your materials and labour, set your margin once, and it works out the price that protects your profit.
No more selling yourself short because you did the sums in your head at 9pm. Set your margin once and every quote respects it. You see the profit on the job before you send it, so you never accidentally work for free again.
Price the whole job, not just the obvious bits. Labour, materials, markup, every time. That is how you stay busy and stay paid.
Protect your profit on every quote.
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