GUIDE
Pricing a service job without guessing
Most small service businesses approach pricing a service job the same way: they count materials and their own hours, and forget everything else. Here's a method that holds up.
1. Start from real material costs
Price materials from what you'll actually pay this week, not what they cost last year. Note where each price came from, so you can update it when it changes.
Add what's easy to forget:
Waste and cut-offs.
Delivery or pickup.
Small parts and supplies you use on every job.
2. Count all the labor
List every task and how long it takes. Then add the time around the work:
Driving to and from the site.
Setup and cleanup.
Buying supplies.
The site visit or estimate itself.
3. Use a loaded labor rate, not a wage
What a worker costs you is more than their hourly pay. A loaded rate includes payroll taxes, insurance, time that can't be billed, tools and vehicle costs. If you only charge the wage, the business pays for everything else.
4. Add overhead, then profit
Overhead keeps the lights on: insurance, phone, software, your office time. Profit is what lets the business grow and survive a slow month. They're different lines. Price both.
5. Show the client how it adds up
A single number invites haggling. A short breakdown builds trust:
Materials
Labor
Anything special about this job
Clients rarely argue with costs they can see.
6. Check it against the job afterward
After the job, compare what you estimated to what it took. If labor ran 20% over, your next estimate should know that.
Common mistakes
Pricing from memory instead of current costs.
Leaving out travel time.
Charging a wage instead of a loaded rate.
Treating profit as whatever's left over.
Never comparing the estimate to the real job.
Replicost, one of our apps, prices a job from sourced material and labor costs before you quote it.