Key takeaways
- Start from your real costs: labour, travel, products, equipment and overhead.
- Add your margin after everyone is paid, including you.
- Set a minimum price per visit so small jobs stay profitable.
- Review your prices once a year, before the season.
Many service businesses set their prices by looking at what the competition charges, then shaving a bit off to win the job. The result: lots of work, and not much left at the end of the year.
A good price starts from your numbers, not someone else's. Here's a simple method.
1. Work out your real hourly labour cost
Your employee's wage isn't their real cost. Add employer payroll charges, vacation, non-billable time (travel, setup, rain days) and training. The real cost of a billed hour is often much higher than the hourly wage.
Do the same math for yourself: your time has value, even as the owner.
2. Add the job's direct costs
For each job, count:
- time on site, at the real hourly cost;
- travel (time and fuel);
- products and materials used;
- equipment wear (ladders, pressure washer, truck).
3. Add your share of overhead
Insurance, phone, software, accountant, advertising, vehicle maintenance: these costs exist even if you do zero jobs. Divide them by the billable hours in your year and add that share to every hour.
4. Add your margin
Margin is what's left once everyone is paid, including you. It funds next year's equipment, a cushion for the winter and growth. If your price leaves no margin, you're working to pay your expenses.
The formula in short:
| Item | Question to ask yourself |
|---|---|
| Labour | How many hours, at what real cost? |
| Travel | How much time and how many kilometres? |
| Products and equipment | What do I use and wear out? |
| Overhead | What share of my yearly costs? |
| Margin | What needs to be left at the end? |
5. Set a minimum per visit
A small job 20 minutes away can cost more than it brings in. A minimum price per visit fixes that: the client pays at least that amount, whatever the size of the job.
6. Compare to the market, intelligently
Once your price is calculated, look at the market. If you're higher:
- check where you lose time (travel, setup, callbacks);
- highlight what justifies your price (guarantee, punctuality, client reviews);
- only then decide whether to adjust.
If you're much lower than the market, it may be a sign you're forgetting costs.
7. Review your prices every year
Your costs change every year. Review your price list before the season, give your regular clients notice and apply the new prices to every new quote.
In short
Real labour cost, direct costs, a share of overhead, margin and a minimum per visit: with these five pieces, your price actually pays you. The market is a benchmark, not a starting point.
Frequently asked questions
How do I calculate the price of a job?
Add up labour time (at its real cost, with payroll charges), travel, products and equipment wear, a share of your overhead, then add your margin.
Should I match my competitors' prices?
Market prices are a benchmark, not a method. If your calculated price is higher than the market, first look for where you're losing time or money before cutting your margin.
When should I raise my prices?
Once a year, before the season, with notice to your regular clients. It's simpler than changing a price mid-season.