How to price a job without guessing
Pricing from a hunch means some jobs pay well and others quietly lose money. This is a simple method you can use on any job: know what it costs, pay yourself for your time, add profit, then check the answer.
Start with what the job really costs
List every cost, not only the obvious ones. Materials are easy to remember. The small things are what get forgotten, and they add up.
- Materials, with a little extra for waste
- Labor: your hours and any helper's hours, at what they cost you
- Fuel, driving and the trips to buy supplies
- Disposal, permits and rentals
- Anything you will pay a subcontractor
Pay yourself for your time
Put a value on your own hours, even if you pay yourself nothing directly. If you leave your time out, the price looks fine and the job still doesn't pay you.
Work out an hourly rate from the income you want, your yearly business costs and the hours you can actually bill. Driving, quoting and paperwork take real time but are not billable, so the rate has to cover them. The hourly rate calculator does this sum.
Add overhead and profit
Overhead is the cost of running the business that sits behind every job: insurance, the truck, tools, software and advertising. Profit is what is left after everything, and it is not the same as your wages. A business needs both.
You can add profit as a markup on cost, or aim for a margin on the price. They sound alike and give different numbers, so pick one and be consistent. The markup and margin calculator shows both.
Materials + labor + other costs = what the job costs you Add your overhead Add the profit you want = the price to quote
Check it against the job and the market
A price built from your costs is a floor, not the whole answer. Compare it with similar jobs you have done and with what other businesses nearby charge. If your number is much higher, look for a cost you can cut or a reason the job is harder. If it is much lower, you may have missed something.
Do not price out of fear of losing the job. A price that wins the work and loses money is not a win.
Show the price so it makes sense
Break the price into lines with quantities and units, so the customer can follow it. You do not have to show your costs, but each line should make sense to someone outside the trade. Say what is not included and how extra work is handled.
Look at what the job earned afterwards
When a job is done, take the price and subtract what it really cost, including your time. Note how long it took against what you allowed. A few finished jobs will show which kinds of work pay well and where your prices run low.
The job profit calculator does this sum for one job.
A checklist before you send the price
- Every cost listed, including your time and the small items
- Overhead and profit added
- Checked against similar jobs and the market
- Itemized with quantities and units
- What is not included, and how extras are handled
- A valid-until date
Free template to go with this
- Painting estimate template: print it or download the PDF.