Knowing how to price a job helps you protect your profit. A full diary does not guarantee that every job is worthwhile. For tradespeople and service businesses, the price must cover the direct cost of doing the work, a fair share of running costs and a return for the risk and time involved. A repeatable costing method makes quotes more consistent and shows where profit is disappearing.
How to price a job: start with direct costs
List materials, subcontractors, travel, equipment hire and any job-specific fees. Estimate labour hours realistically, including preparation, travel, site visits and finishing work. If you employ staff, the cost of an hour is more than the hourly wage: allow for employer costs, paid leave and the time that cannot be billed to a customer.
For example, a small project may need £500 of materials and £600 of labour. If you quote £1,100, you have covered those estimates but nothing towards insurance, vehicle costs, software, administration or profit. The quote also leaves no margin for a delayed job or a return visit.
Add overhead and a profit target
Overheads are costs that support the business across all jobs. Work out an annual estimate, then choose a sensible way to allocate them: billable days, labour hours or expected jobs. Add a profit target after the full cost is visible. Profit is not the same as the owner’s pay where the owner’s time is already included in labour cost.
A percentage markup on cost and a percentage profit margin on the selling price are different calculations. If you use a fixed percentage, check which one your spreadsheet applies.
Review the result after completion
Compare the original estimate with actual materials, hours and extras. Record changes the customer requested and whether they were charged. Look for patterns: repeated underestimates, supplier price rises or travel that consumes more time than expected. That feedback should improve the next quote.
Good bookkeeping supports this review when costs are linked to the right job. AA & R Certified Accountants helps small businesses understand their costs, margins and cash position. Speak to us if your diary is busy but the profit is not where you expect it to be.
Related reading: Hemel Hempstead Cash Flow Guide for Tradespeople.