Most sole traders price a job the same way: picture a number, add a bit for the hassle, then quietly knock some off because it sounded steep when they said it out loud. It gets the quote sent. It also explains why a flat-out year can end with almost nothing in the bank.
The way you price a job is the biggest lever you have on what you earn. Bigger than working longer. Bigger than chasing more enquiries. And unlike most business advice, it is arithmetic, which means you can do it once on the back of an envelope and stop guessing for good.
Guessing Feels Faster Than Working It Out
Picture an ordinary month for a self employed gardener charging £180 a day. Twenty working days, so £3,600 on the way in. Except it rained hard for three of them. One went on quoting, invoicing and two trips to the tip. And on one job the customer decided halfway through that the beds should be edged as well, which took an extra half day nobody paid for.
Fifteen paid days, then. £2,700.
Out of that comes the van, diesel, insurance, green waste charges, a strimmer that gave up, the accountant’s monthly fee and the phone bill. Call it £900. That leaves £1,800 before a penny of tax, in a month where they worked every dry day going. Nobody thinks about any of that when they price a job standing on a doorstep with the customer waiting.
Start With What An Hour Of Your Time Actually Costs
Before you can price a job with any confidence, you need one number you probably do not have: what an hour of you costs to put on site.
Add up everything you pay for whether or not you work this week:
- van finance or lease, tax, MOT, servicing, tyres and diesel
- public liability and any other insurance you carry
- accountant, software subscriptions, phone and broadband
- tools, replacements, consumables and workwear
- training, tickets, certification and trade body fees
Say it comes to £9,600 a year. That is £800 a month you owe before you have earned anything at all.
Now count the hours you can genuinely bill. There are 52 weeks in the year. Take four off for holiday and one more for illness, family and the weeks the work simply is not there. That leaves 47 weeks at 40 hours, or 1,880 hours. But you will not bill 1,880 hours. You will bill perhaps 60% of them, because the rest disappear into driving, quoting, buying materials, raising invoices, chasing payment and standing in the queue at the merchant. Call it 1,100 billable hours.
£9,600 spread across 1,100 hours is roughly £8.70 an hour of overhead before you pay yourself a thing. If you want to draw £30,000 after tax, and you set aside somewhere between a quarter and a third of your profit for income tax and National Insurance, you need something like £45,000 of profit to get there. Add the overheads back on and divide by 1,100: about £50 an hour, or £400 for an eight hour day, before any materials.
None of this is complicated, but you cannot price a job well without it. Most people working off instinct land 20% to 30% under their real number, every single time, and never find out why the year felt harder than it looked.
The Four Numbers You Need Before You Price A Job
Once you know your hourly cost, you can price a job in four sums.
- Materials at what they really cost you, including waste, offcuts, the fixings you always forget and the hour spent collecting the lot.
- Time, counted honestly: travel both ways, setting up, protecting floors, cleaning down, and the second visit to fit the part that was not in stock.
- Risk: a 1930s house, a loft you cannot stand up in, a customer who has already fallen out with one tradesman.
- What it is worth to the buyer. Fixing a leak at seven on a Sunday evening is not the same product as fitting a tap on a Tuesday morning, even if both take forty minutes.
That fourth one makes people squirm, and it should not. You are not overcharging because someone is desperate. You are charging for availability, for the fact that you answered the phone, and for the twenty years that let you know which forty minutes to spend.
Fixed Price, Day Rate Or By The Hour?
Hourly billing feels safe and quietly punishes you for being good at your trade. Get faster with experience and you earn less for the same result, which is a strange way to run anything. It does suit work where nobody can see the end from the start: fault finding, diagnostics, the first day on a property that has been neglected for a decade.
A day rate is honest for open-ended work and easy for customers to follow. Set it from your hourly figure and hold firm on half days, because a half day usually swallows most of a full one once travel is counted.
Fixed prices are where the money is, provided your estimating is accurate. You carry the risk, so you keep the gain when it goes well. How you price a job on a fixed basis depends entirely on whether you have done that exact job often enough to predict it. Laid forty kitchen floors? You know. First commercial fit-out? Quote a day rate, or price it high enough that one bad surprise does not eat the month.
Build In The Things That Always Happen
Contingency is not padding. It is the honest cost of a world where the isolation valve is seized and the plasterboard behind the tiles is soaked through.
Ten per cent on straightforward work. Fifteen or twenty on anything in a building older than you are. When you price a job in a Victorian terrace, assume something behind the wall is not what the customer described.
Two more lines belong in every quote. Materials are priced today and the quote is valid for 30 days. Any extra work is quoted separately and agreed in writing before it starts. That second line ends most disputes before they begin, because the moment somebody says “while you’re here”, you have a script ready: happy to do it, here is what it adds, I will put it in writing.
Stop Pricing Against The Cheapest Quote In Town
There is always somebody cheaper. Usually they are cheaper because they have never done the sum you have just done, and in eighteen months they will be back working for someone else.
A customer sitting with three quotes on the kitchen table is not comparing hourly rates. They are trying to work out which of you will turn up, do it properly and not vanish at the halfway point. Price is the only hard number in front of them, so they use it as a stand-in for everything else. Give them better evidence and the number carries less weight.
If you price a job 15% above the other two, you have to be visibly better somewhere the customer can check before they ever meet you. A quote that arrives the same day. Reviews with names and dates on them. Photographs of work you actually did rather than stock images of somebody else’s kitchen. That is the real argument for having a proper place online, and it is what our small business website design is built to do: not win prizes, but make the dearer quote feel like the safer choice.
How To Write A Quote That Gets Accepted
Speed wins more work than presentation. Price a job and get the quote out within 48 hours, ideally the same evening you visited. A great many jobs are lost to the tradesman who promised to send something over and took nine days about it.
What goes in it:
- what you are doing, in the customer’s language rather than trade shorthand
- what is not included: making good, decorating, disposal, scaffolding, parking
- the total, with VAT shown separately if you are registered
- payment terms: deposit, any stage payments, how many days to settle the balance
- a date the price expires
Two options beat one. A standard version and a better version turns the decision from yes or no into which, and a fair number of people take the dearer one. Three or more options is a spreadsheet, not a quote.
Assume the quote gets googled. Most people read the price, then type your business name into their phone to see who they are dealing with. Our examples of the sites we build show the kind of thing that survives that two minute check: a few clear pages, real photos, and a number that rings your pocket.
Saying No Is Part Of How You Price A Job
Some work should be declined and the rest should be priced properly. In practice those are the same decision.
Warning signs, in no particular order: they want a price before you have seen the job, they bring up the last tradesman within two minutes, they start haggling before you have finished your sentence, they want it cash and quick, they cannot describe what finished looks like.
You do not need to argue with any of it. Quote your full rate with a difficulty loading on top and let the number speak. Say yes and you are paid for the aggravation. Say no and you have handed yourself a free week to spend on better work. Both endings are acceptable, which is exactly why this is easier than refusing outright.
VAT Moves The Sum, So Watch The Line
If your turnover across any rolling 12 month period passes the registration threshold, you must register for VAT, and it is a moving 12 month window rather than your tax year. Check the current figure and how the rules work on the gov.uk VAT registration guidance rather than trusting a number somebody quoted in a Facebook group.
It matters for pricing because of who buys from you. Commercial clients reclaim the VAT and barely blink. Householders cannot, so the same work jumps by a fifth overnight unless you absorb part of it and take the hit on your margin.
If you are within a few thousand pounds of the line, make the decision on purpose. Plan the price change and tell people early, or manage your turnover deliberately, or take on a subcontractor and grow straight through it. Sailing over the line by accident in November and discovering it in February is the version that costs real money.
Putting Your Prices Up Without Losing Everybody
Pick a date once a year and review the figure. Costs move whether you look at them or not: insurance, fuel, materials, the merchant discount you lost when your volumes dropped.
For regular customers, thirty days notice in a short message does the job. No apology and no essay. Honour every quote you have already issued, then price a job at the new rate from the date you named and hold it.
Expect to lose one or two. That is not a failure, it is the maths working. Raise prices by 10% and lose 10% of your customers and you earn much the same money for noticeably less work and less diesel. The ones who walk over 10% were rarely the ones paying inside 30 days anyway.
So How Should You Price A Job?
Work out your annual overheads and your genuinely billable hours, then divide one by the other. Add what you need to take home, plus the tax on it. That single hourly figure is what everything else hangs from.
Then for each piece of work: materials at true cost, hours counted honestly with travel and clean-up in them, a contingency sized to how much you can actually see, and a moment’s thought about what the outcome is worth to the person paying. Write it down. Send it fast. Spell out what is excluded.
Do that for one month and the number stops being a negotiation with yourself. You will price a job in ten minutes and mean it, instead of lying awake afterwards wondering whether you left £400 on somebody’s kitchen table.