Pricing is one of the biggest challenges for contractors. Price too high and you lose jobs to competitors. Price too low and you work hard for little profit—or worse, lose money on jobs.
This guide covers practical approaches to pricing your contractor services confidently and profitably.
The True Cost of Your Work
Before setting prices, you need to understand what each job actually costs you. Many contractors underestimate their true costs, leading to thin margins or losses.
Direct Costs
- Materials - Everything you'll use on the job
- Subcontractors - Any outside labour you bring in
- Equipment rental - Specialist tools for specific jobs
- Permits and fees - Required approvals and inspections
Indirect Costs (Overhead)
- Your time - Including travel, quoting, and admin
- Vehicle costs - Fuel, insurance, maintenance, depreciation
- Tools and equipment - Purchase, maintenance, replacement
- Insurance - Public liability, professional indemnity
- Business costs - Phone, software, accounting, marketing
- Training and certifications - Keeping qualifications current
The Hidden Cost of Free Quotes
If you quote 10 jobs and win 3, the cost of quoting the 7 you didn't win must be recovered somewhere. Factor this into your pricing—your time has value even when you're not billing.
Pricing Methods
Hourly/Daily Rates
Best for: Maintenance work, repairs, time-based tasks
Calculate your minimum hourly rate:
- Add up all monthly overhead costs
- Divide by realistic billable hours (not 40/week—account for quotes, travel, admin)
- Add your desired profit margin (typically 15-30%)
- Add employer costs if applicable
Example:
- Monthly overheads: £4,000
- Realistic billable hours: 120/month
- Base rate needed: £33.33/hour
- With 25% margin: £41.67/hour
- Rounded rate: £45/hour
Project-Based Pricing
Best for: Defined scope work, installations, renovations
Estimate total time and materials, then add margin:
- Calculate materials cost
- Estimate labour hours x your hourly rate
- Add contingency (10-20% for unknowns)
- Apply profit margin
Example kitchen fit:
- Materials: £2,000
- Labour: 40 hours x £45 = £1,800
- Contingency (15%): £570
- Subtotal: £4,370
- Profit margin (20%): £874
- Quote price: £5,244
Value-Based Pricing
Best for: Specialist work, emergency services, unique skills
Price based on the value you provide, not just your costs. A locksmith opening a door in 10 minutes provides enormous value—being locked out is a crisis. The price reflects solving the problem, not just the time spent.
Competitive Positioning
Research Your Market
- Get quotes from competitors (have a friend request them)
- Talk to suppliers about typical job prices
- Network with non-competing trades to share insights
- Check online platforms for price ranges
Decide Your Position
- Budget option: High volume, low margins, efficient operations
- Mid-market: Balance of price and quality, most common
- Premium: Higher prices, exceptional service, specialist expertise
Your pricing should match your positioning. Trying to be cheap while marketing as premium confuses customers.
Common Pricing Mistakes
Underpricing to Win Work
Winning every job means you're probably too cheap. A healthy win rate is typically 30-50%. If you're winning 80%+, you're leaving money on the table.
Ignoring Your Own Time
If you spend 3 hours quoting a job, that time has to be paid for somehow. Either factor it into won job prices or charge for detailed quotes on complex work.
Failing to Adjust for Difficulty
Not all hours are equal. Complex work, awkward access, or demanding clients should command higher rates. Factor in the stress and challenge level.
Copying Competitor Prices
Your costs aren't their costs. If a competitor is pricing too low, matching them just means you'll both struggle. Know your numbers and price accordingly.
Communicating Price to Customers
Be Confident
Hesitation or apologising for your prices signals you don't believe in them. State your price clearly and move on to explaining what's included.
Itemise Clearly
Detailed quotes build trust. Show materials, labour, and what's included. Customers can see where the money goes.
Explain Value
Don't just list tasks—explain benefits. "10-year guarantee on all workmanship" is more compelling than "quality installation."
Handle Price Objections
If a customer says you're too expensive:
- Ask what they were expecting (understand their budget)
- Explain what they're getting for the price
- Offer alternatives at different price points if possible
- Walk away if the job won't be profitable
Using Software to Quote Accurately
Modern quoting software like Cadobook helps you:
- Store pricing data - Consistent rates across all quotes
- Calculate automatically - Reduce calculation errors
- Save templates - Quote similar jobs quickly
- Track history - See which prices won and lost
- Present professionally - Branded quotes that build confidence
The time saved on admin lets you quote more jobs and respond faster—both of which improve your win rate.
Reviewing and Adjusting Prices
Your prices shouldn't be static. Review them:
- Annually at minimum, to account for inflation
- When costs change - Material price increases, fuel costs, etc.
- When demand changes - High demand = opportunity to increase
- When you're too busy - If you can't handle enquiries, prices are too low
Action Steps
- Calculate your true monthly overhead costs
- Determine your realistic billable hours
- Set your minimum hourly rate
- Apply appropriate margins for different job types
- Research competitor pricing for context
- Create quote templates for your common jobs
- Review and adjust quarterly
Pricing is part calculation, part strategy. Get the numbers right first, then refine based on market response.
Need help creating accurate quotes? Try Cadobook to streamline your pricing and win more profitable jobs.