How to Price a Job So You Actually Make Money

Busy is not the same as profitable

The most common way a trade business gets in trouble is not a lack of work. It is work priced too low. Win enough jobs at the wrong price and you can be booked solid, working Saturdays, and still have less in the bank than you did last year. Pricing is not a guess you make in the driveway. It is arithmetic you do before you say a number.

Start with what the job really costs

Every price is built from the same pieces:

• Labor: the hours the job will take, times what those hours really cost you: the wage plus payroll costs, insurance and the time spent driving and setting up.
• Materials: everything that goes into the job, plus the trips to the store and what gets wasted.
• Overhead: the truck, the phone, the software, the insurance and the part of your own time that is not on a job. Every job has to carry a share of it.

Add those up and you have what the job costs. That number is your floor, not your price.

Then add the margin you need

Your margin is what is left after the job's labor and materials are paid. It has to cover overhead and still leave a profit. Decide the margin you need on purpose and use it on every quote, instead of shaving it to win a job you are nervous about losing. If a customer only wants the job at a price that does not cover your costs, that job is not a win. It is a loss you scheduled.

Price the same way every time

The fastest way to fix your pricing is a price book: your rates written down once, by the square foot, the room, the piece or the hour, and used on every quote. Two things happen. You stop forgetting costs like prep time and trips for materials. And when you look back, you can tell which kind of job pays and which one only keeps you busy.

Check the job after it is done

When the job is finished, compare what you charged with what it really took: the hours your crew worked and what you spent on materials. If a kind of job keeps coming in under, raise its price or change how you do it. One look per job is enough to catch the jobs that lose money before they become a habit.

When a customer says it is too high

Do not drop the price first. Ask what they are comparing it to, then explain what is included: the prep, the materials, the cleanup and the guarantee on your work. Sometimes the right answer is a smaller job for less money, not the same job for less. And sometimes the right answer is to let it go.

Jetsy has a price book built in, so every quote is priced the same way, and it shows what each finished job kept after labor and materials. $25 a month, and the first 7 days are free with no card.