The Pricing Problem

Most home service businesses price one of two ways: match the competitor down the street, or slap a markup on materials and hope for the best. Both approaches are gambling with your profitability.

The fundamental problem is that neither method accounts for your actual overhead, which is the fixed costs of running your business that exist whether you do one job or a hundred. Rent, insurance, vehicles, admin staff, software: it all adds up.

When you price without knowing your overhead burden, you can win a job and lose money on it. You feel busy and successful, but your bank account tells a different story.

This playbook gives you a pricing framework based on your real numbers. Not gut feel, not competitors, not what you charged last year plus 5%.

Know Your Breakeven

Calculate your total monthly overhead: rent, insurance, vehicles, admin salaries, software, everything that's not directly tied to a job. Divide that by the number of billable hours your crews produce. That's your hourly overhead burden. Every job must cover this, plus direct costs, plus profit.

The Pricing Formula

Job Price = (Direct Labor + Materials + Subs) + Overhead Allocation + Target Profit Margin. If your overhead burden is $45/hour and a job takes 16 crew-hours, that's $720 in overhead alone, before you've made a dime of profit.

Pricing With Confidence

When you price based on real numbers, you can walk away from bad jobs without anxiety. You know your floor. You know your margin. You're not guessing. You're deciding. That confidence changes how you sell.