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How to Price a Job Without Leaving Money on the Table
Most contractors don't lose money because they're bad at the work. They lose it on the estimate — pricing off gut feel, copying the last guy, or doing markup math that quietly leaves 15 points of profit on the table every single job. Let's fix the math.
The three numbers every price is built on
Before you can price anything, you need to know these cold:
- Direct cost — materials, the labor hours on that job, and any subcontractor cost. The stuff that only exists because this job exists.
- Overhead — truck payments, insurance, software, the phone, your office time. It happens whether or not this job books, but every job has to chip in to cover it.
- Profit — what's left after both. Not your salary if you're swinging a hammer — that's labor. Profit is the reward for owning the risk.
Markup vs margin — and why it costs you
Here's the trap in numbers. You've got a $100 cost and you "add 50%." You charge $150. Feels like 50% profit — but $50 of $150 is only 33%. To actually keep a 50% margin you'd need to charge $200. On a $400 job that gap is real money, and it compounds across every estimate you write all year.
What to actually charge
Plug in your real cost and the margin you want to keep. This is the same formula a healthy shop uses on every estimate:
What Should I Charge? — Margin Calculator
Enter your direct cost and target margin. We'll show the price that actually hits it.
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Stop racing competitors to the bottom
The pressure to underprice usually comes from one place: chasing the same shared leads as eight other trucks, where the only lever left is price. Win the customer before it's a bidding war — through referrals, reputation, and being the shop they already trust — and you get to price for margin instead of survival. (That's the whole reason we harp on owning your leads instead of renting them from Angi.)
Price like you plan to be here in ten years.
Booked Job is where service pros learn to charge what the work is worth and keep the schedule full. Real talk, no fluff.
Follow on Facebook →Frequently asked questions
What's the difference between markup and margin?
Markup is added on top of cost; margin is profit as a share of the final price. A 50% markup on $100 = $150, which is only a 33% margin. Mixing them up underprices nearly every job.
What profit margin should a contractor aim for?
Most healthy shops target 50–60% gross margin per job, leaving a net profit around 10–20% after overhead. Net below 8% and one slow month can erase the year.
How do I price to hit a target margin?
Divide your direct cost by (1 − target margin). $400 ÷ (1 − 0.55) ≈ $889. A flat percent "on top" almost always undershoots.