How to Price a Job So You Actually Make a Profit
Most tradespeople undercharge. Not because they don’t know their worth – but because they’re guessing. They price a job based on what feels right, what a mate charges, or what they think the customer will accept. Then they wonder why, after a solid week on the tools, the bank account doesn’t reflect it.
Pricing properly isn’t complicated. But it does require a system – and most sole traders never bother to build one. This guide will help you build one in an afternoon.
Why “Day Rate × Days” Isn’t a Pricing Strategy
The most common way trades price jobs is simple multiplication: how many days do I think this’ll take, times my day rate. Job done.
The problem is that this ignores everything that actually costs you money:
- Materials margin – or lack of one
- Travel and fuel
- Time on-site that isn’t billable (moving furniture, waiting for inspections, clearing up)
- Your own downtime – the days you’re not on a job but still have bills to pay
- Tools, wear and tear, van servicing, insurance, phone, software
- The hour you spent quoting the job in the first place
Day rate × days covers your labour. It doesn’t cover your business. That’s why plenty of tradespeople stay busy all year and still feel skint.
Step 1: Know Your Real Hourly Cost
Before you can price anything properly, you need to know what it actually costs to operate your business – not just your labour.
Start with your annual fixed costs. Write down everything:
- Van: finance payments, insurance, MOT, servicing, fuel average
- Tools and equipment (annual spend or replacement cost spread over years)
- Public liability insurance, tool insurance, van insurance
- Phone, apps, software, accounting
- Any trade memberships, certifications or renewal fees
- Your own sick days, holiday and unpaid admin time
Add it all up. For most sole traders in the UK this number sits somewhere between £8,000 and £18,000 per year depending on your trade and setup.
Now work out how many billable hours you actually have. Not hours in the year – billable hours. A tradesperson working 48 weeks a year, 5 days a week, 7 billable hours a day has roughly 1,680 billable hours. In reality, factor in quoting time, travel, admin and the odd slow week and it’s closer to 1,400.
Divide your annual costs by your billable hours. That’s your overhead cost per hour – the number that needs to be in every price you quote, on top of your labour.
If your overheads are £12,000 and you have 1,400 billable hours, that’s £8.57 per hour just to break even on running costs.
Step 2: Price Materials With a Margin
A lot of tradespeople charge materials at cost – what they paid, what’s on the invoice. That’s leaving money on the table.
You are providing a materials procurement service. You source the right materials, know what’s needed, collect them, manage waste and returns. That has value.
A 15-20% margin on materials is standard and completely reasonable. If you’re buying £400 of materials, charging £460-480 is fair. If a customer questions it, you can explain that the price covers your time sourcing and managing materials – which it does.
The exception is large, high-value material orders where the margin becomes obviously large. Use your judgement. A 10% margin on a £4,000 bathroom suite is still £400, which is fair.
Step 3: Build Your Quote From the Ground Up
Stop pricing from instinct. Build every quote from the same components:
Labour – estimated hours × your target hourly rate (which should include your overhead cost from Step 1 plus your actual earnings target)
Materials – actual cost + your margin
Fixed extras – skip hire, specialist equipment hire, subcontractor costs if applicable
Contingency – on anything that involves unknowns (under-floor work, old electrics, anything behind walls) add 10-15%. If you don’t need it, great. If you do, you’re covered.
VAT – if you’re VAT registered, be clear about whether your quote is ex-VAT or inclusive.
When you add it up this way, you’ll often find you were undercharging by 15-25% on your previous instinct prices. That gap is the difference between a business that builds and one that treads water.
Step 4: Quote for the Job, Not the Customer
One of the most common pricing mistakes is adjusting your price based on the size of the house, the car on the drive, or how well-spoken the customer is. This feels logical – charge the wealthy more, give a break to someone who seems to be struggling.
The problem is it makes your pricing inconsistent and unpredictable. You start second-guessing every quote. You lose track of whether you’re profitable. And frankly, the person with the expensive car might have every penny tied up in it.
Price the job. Every time. Same methodology, same margins, same result. If a job genuinely doesn’t suit your rates, you can decline it – but that’s a different conversation to quietly discounting yourself.
Step 5: Present Your Quote Professionally
How you present a quote affects whether you win the job – and whether customers push back on the price.
A professional written quote signals that you’re organised, reliable and serious about your work. A WhatsApp message with a number in it signals the opposite, no matter how good your work actually is.
A proper quote should include:
- Your company name, address and contact details
- The customer’s name and address
- A clear description of the work to be done
- A breakdown of labour and materials (you don’t need to itemise every nail, but key line items matter)
- The total price, clearly stating whether VAT is included
- How long the quote is valid for (14-30 days is standard)
- Your payment terms – deposit required, balance due on completion, etc.
- A way for the customer to formally approve it
That last point matters more than people think. A quote that gets a verbal “yeah go ahead” is not the same as a signed approval. When a customer has signed off a written quote, scope creep conversations become much easier, and you have protection if things go wrong.
Step 6: Review Your Pricing Every Year
Material costs change. Fuel goes up. Your insurance renews at a different price. Your experience grows and your work gets faster – which means fewer hours per job, which means your day rate should probably increase to compensate.
Most sole traders set a day rate when they start out and never revisit it. If that’s you, you’re almost certainly undercharging compared to what the market would bear and what your costs actually require.
Set a reminder once a year – January works well – to recalculate your overhead costs, check what others in your trade are charging locally, and adjust your rates accordingly. Even a £5/hour increase, applied consistently, adds up to thousands over the course of a year.
The Quoting Problem Nobody Talks About
All of the above assumes you’re actually getting quotes out the door efficiently. And for a lot of sole traders, that’s where things fall apart.
You finish a day on the tools, get home, and you’ve got three quotes to write up. An hour each, if you’re doing them properly. By the time you’ve eaten and dealt with family life, it’s 10pm. So you fire off a quick WhatsApp message with a rough number, or you put it off until the weekend, or the customer chases you first.
That delay – or that rough message – is costing you jobs. Customers get multiple quotes. The one who comes back first, with something professional, wins more often than not.
This is exactly the problem Kwowta is built to solve. Build your materials and labour rates once, then pull them into any quote in minutes. Send a professional, branded quote by email or WhatsApp directly from your phone – on the drive home, between jobs, wherever you are. Customers get a proper web link to approve with a digital signature. You get notified the moment they do.
Try Kwowta free for 6 months – no card required
Quick Reference: Pricing Checklist
Before you send any quote, run through this:
- [ ] Have I calculated labour based on realistic hours, not optimistic ones?
- [ ] Have I included my overhead costs, not just my day rate?
- [ ] Have I applied a materials margin?
- [ ] Have I added contingency for any unknowns?
- [ ] Is VAT clearly stated?
- [ ] Are my payment terms included?
- [ ] Is this a written quote with a clear approval mechanism?
If you can tick every box, you’re pricing properly. Most of your competition isn’t.
Kwowta is a quoting and invoice app built specifically for trades businesses. Join the beta free for 6 months at kwowta.com.
