How to price your services
Most new businesses charge too little, win lots of work, and still run out of money. Pricing is not guessing what customers will pay. It starts with what the job really costs you, then the profit you need on top.
Work out what a job really costs
- Direct costs: materials, travel, fuel, data, anything used up on the job.
- Your time: including quoting, travelling and admin, not only the hours on site.
- Overheads: your share of phone, tools, insurance, software, and marketing.
Set an hourly rate that covers your life
Decide what you need to earn in a month, add your monthly overheads, and divide by the hours you can actually bill. That last part is where people go wrong: between quoting, travel and quiet days, few people bill every hour they work.
Add profit, then check the market
Profit is not your salary. It is what lets the business survive a slow month and grow. Add it on top, then compare your price with what others charge. If you are much higher, look at your costs or the value you offer. If you are much lower, you are probably undercharging.
Common mistakes
- Pricing to match the cheapest competitor.
- Forgetting travel, time spent quoting, or call-outs.
- Never raising prices as costs go up.
- Starting materials-heavy jobs without a deposit.
Then put it in a clear quote: how to write a quote and invoice.
Common questions
How do I calculate my hourly rate?
Add what you need to earn in a month to your monthly overheads, then divide by the hours you can actually bill, not every hour you work. Add profit on top.
Should I charge less than competitors to get customers?
Rarely. Competing on the lowest price usually leaves no profit. Price from your real costs and the value you offer, and win on reliability and service.
Should I ask for a deposit?
For jobs with materials or a long duration, yes, so you never fund the job out of your own pocket.