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Free guide · Reviewed July 2026

How to Price a Job and Not Lose Money

Most trades don't go under because the work is bad. They go under because the price was wrong. And the price is usually lost at the site visit and in the costs nobody wrote down. Here's how to scope a job, cost the hidden bits, and turn cost into a price where the profit is real. Plain English, no spreadsheet wizardry required.

Part 1Cost is not price: the £100 trap

Two numbers run every job, and mixing them up is where the money leaks away:

  • Cost: what the job actually costs you: materials, the wages you pay, plant hire, waste.
  • Price: what the customer pays you.

The gap between the two is where your whole business lives: your overheads, your wage and your profit all come out of it. The classic trap is pricing off "materials plus a bit for my time" and forgetting everything that isn't on the receipt: the van, the insurance, the hours spent quoting, the trip to the merchant. None of that is free, and if the price doesn't carry it, it comes straight out of your profit. That's why so many trades are flat out and still skint.

The mindset shiftDon't ask "what did the materials cost?" Ask "what does it cost me to turn up and do this job properly, including the parts of my week the customer never sees?" Price that, then add profit on top.

Part 2Price the job in front of you: the site visit

By the time you're adding up numbers, the job is mostly already won or lost. The expensive mistakes happen earlier, on the walk-round, when you nod along, picture the easy version of the job, and miss the things that will actually cost you time and money on the day.

Treat the site visit as a survey, not a chat. Before you leave, you want to know:

  • Access: can you get materials and a van close, or is everything carried? Stairs, narrow doorways, upper floors, no parking?
  • Condition: what's behind the obvious? Old wiring, damp, rot, asbestos risk in pre-2000 buildings, a floor that won't be level once you lift it.
  • The customer: are they clear on what they want, or will this be ten changes of mind? Vague customers cost money.
  • Constraints: working hours, an occupied house, shared walls, a tenant, a deadline tied to something else.
The mindsetDon't price the job you hope it is. Price the job that's actually in front of you, including the awkward bits you'd rather not think about. They don't go away because you left them off the quote; they just come out of your profit instead.

Part 3Measure, don't guess: the take-off & hidden costs

A "take-off" is simply a written list of everything the job needs, with quantities, taken from measurements rather than memory. It's the single most reliable defence against under-pricing, because it forces you to count things you'd otherwise round down in your head.

Work through the job in the order you'll actually do it, and write down each material, its quantity and a buying price. Two habits make a real difference:

  • Add wastage. Tiles, timber, cable, plaster and aggregate all get cut, dropped, mis-ordered and damaged. A sensible wastage allowance on materials is normal practice. Guessing "about right" usually means a second trip to the merchant on your own time.
  • Price labour in real hours, not optimistic ones. Estimate how long each stage truly takes including set-up, clean-down and the fiddly finishing that always runs over, then sense-check it against the last job like it.

Then add the costs that rarely make it onto a quote because they're not "the work". They're still real cash out of your pocket. Run down this list on every job and ask "does this one apply?"

Hidden costWhen it bites
Waste & disposalSkip hire, tip runs, hazardous waste, the time spent loading and driving it.
Access & site setupScaffold or tower hire, access equipment, protection (dust sheets, floor protection, hoarding).
Getting thereDelivery charges, fuel, parking, congestion/clean-air charges, time stuck in traffic on a far site.
Plant & toolsSpecialist hire, consumables (blades, discs, fixings, sealant), tool wear on heavy jobs.
Other tradesA sparky or plumber you sub in: their price plus your time coordinating them.
Your office timeThe survey, the quote, ordering, scheduling and chasing. Unpaid, but hours all the same.
Making goodPlastering, decorating and tidying after the "main" work, the bit customers assume is included.

Add it all up and that's your bare cost: the complete, honest figure that everything else in this guide is built on. Get this right and the rest is arithmetic; get it wrong and no amount of markup saves you.

A quiet one to watchMaterials price rises. If there's a gap between quoting and starting, the merchant price can move under you. For volatile materials, either price from a current quote with a short validity, or say the figure holds for a set number of days, so a delay doesn't turn your margin into the supplier's.

Read the detail: The hidden costs of a job — the full per-job checklist, category by category.

Part 4Markup vs margin: the mistake that quietly bankrupts trades

This one costs UK trades more money than almost anything else, because it feels right while it's underpaying you.

  • Markup is the percentage you add on top of your cost.
  • Margin is the percentage of the final price that you keep.

They are not the same number. Say a job costs you £100 and you add 20% markup. You charge £120. Your profit is £20 — but that's only 16.7% of the £120 the customer paid. You added "20%" but you're keeping a 16.7% margin. The bigger the job, the bigger the shortfall.

Here's how the two line up, so you can add the markup that actually delivers the margin you want:

Markup you add (on cost)Margin you actually keep
10%9.1%
20%16.7%
25%20%
33%25%
50%33%
100%50%
The rule of thumbTo keep a 20% margin, add a 25% markup. To keep a third (33%), add 50%. If you want a target margin from a markup, the sum is: markup = margin ÷ (100% − margin).

Read the detail: Markup vs margin — the conversion, both directions, with a worked example.

Part 5Recover your overheads: the hours you never bill

Overheads are the costs you carry whether or not you're on a job. They don't appear on any single quote, so they're easy to forget. And forgetting them is the same as paying them out of your own pocket.

For a typical trade they include:

  • Van: finance or lease, fuel, tax, insurance, servicing, repairs
  • Public liability and other insurance
  • Tools, replacements, calibration and PAT testing
  • Phone, broadband, software and subscriptions
  • Accountant or bookkeeper
  • Training, certifications and scheme memberships
  • The hours you spend quoting, ordering, chasing payment and driving — unpaid, but very real

The fair way to recover them is to spread the yearly total across the jobs you do, and the cleanest way to do that is per day. That's what a proper day rate is for.

Part 6Your day rate, done properly

An overhead day rate answers one question: "what does a day of my business cost to run, before I've made a penny of profit?" The sum is simple:

The formulaOverhead day rate = total yearly overheads ÷ the days you can actually bill in a year

The trap is the second number. There are 365 days in a year, but you can't bill most of them. Knock off weekends, holidays, bank holidays, the odd sick day, and the days lost to quoting, paperwork, merchant runs and gaps between jobs, and a one-person trade is often billing nearer 200 days a year, sometimes fewer.

So if your overheads come to £11,000 a year and you bill 200 days, that's £55 a day that every job needs to carry just to keep the lights on, before your wage and before profit. Divide by 365 instead and you'd kid yourself it's only £30, and run at a loss without noticing.

Don't forget your own wageThe overhead day rate covers the business. You still need to pay yourself. Decide what your labour is worth per day and make sure it's in the job's cost. Then the profit markup on top is genuine profit, not just your wages in disguise.

Read the detail: How to work out your day rate — the full three-layer method, step by step.

Part 7What to actually charge: a worked example

Let's price a small domestic bathroom refit, six days on site. We'll build it up the right way: complete cost, then overhead recovery, then profit.

Materials (tiles, suite, sundries) inc. wastage£2,000
Labour at cost (you at £250/day + a hand at £200/day, 6 days)£2,700
Hidden costs (skip, carrying up, making good, ordering)£600
Bare cost (complete)£5,300
+ Overhead recovery (£55/day × 6 days)£330
= Break-even (don't go below this)£5,630
+ Profit markup (20% of bare cost)£1,060
Price to quote (before VAT)£6,690

Notice three things. The hidden costs added £600. Leave them off, as many quotes do, and that's £600 out of your own pocket. Break-even is £5,630, not the £4,700 the "obvious" materials-and-labour suggested, and the gap is real money. And because the profit is a markup on cost, the £1,060 is about a 16% margin on the £6,690 price, so if you wanted a true 20% margin you'd push the markup higher (Part 4). VAT (if you're registered) goes on top of the £6,690, along with any CIS treatment for business customers (see the VAT & CIS guide).

Pricing the unknowns: contingencyFor the parts of a job you genuinely can't see yet (the state of the joists once the floor's up), add a contingency sized to the uncertainty, or quote a clearly-labelled provisional sum to be adjusted to the actual cost. Both are fair and honest; the unfair one is silently absorbing every surprise yourself and wondering where the profit went.
The number that mattersThe most dangerous quote is the one that looks fine but sits below break-even. Always know your break-even figure before you talk price. It's the floor you never drop under, no matter how much you want the job.

Part 8Scope creep: the silent profit-killer

You can price a job perfectly and still lose money if the job grows after you've quoted. "While you're here, could you just…" is friendly, reasonable — and the single most common way a profitable job turns into a break-even one.

The fix is two simple habits:

  • Write down what's included, and what isn't. A scope that says "supply and fit X; does not include Y or Z" removes the grey area where free work lives.
  • Price every change as a variation. When something's added, it gets its own little written quote (amount, what it covers) and the customer says yes before you do it. Not a confrontation; just "happy to do that, it's an extra £X, shall I go ahead?"
Variations protect both sidesA clear variation just means the customer knows exactly what they're agreeing to and what it costs, with no nasty surprise on the final invoice. Good customers respect it; the ones who don't are exactly the ones you needed it for.

Part 9Pricing mistakes that cost you

  • Pricing off an incomplete cost. Leaving out waste, access, delivery, making good and your office time. Get the cost complete first: the selling price is only ever as honest as the cost underneath it.
  • Forgetting your own time. Quoting, ordering, driving and chasing payment are work. If they're not in the price, you're doing them for free.
  • Confusing markup with margin. Adding "20%" and thinking you're keeping 20%. You're not. See Part 4.
  • Copying a competitor's price. You have no idea what their costs or overheads are. Price your job from your numbers, not theirs.
  • Not pricing the extras. "Can you just…" is the most expensive phrase in the trade. Every change should be priced and signed off before you do it.
  • Racing to the bottom. Winning work by being cheapest is a trap: you end up busiest and poorest. Win on a clear, professional, fair quote instead.
  • Round-number guessing. "Call it three grand" is a guess, not a price. Build it up from cost and you'll quote with confidence, and defend it when challenged.

Part 10Your quick checklist

Before you send your next quote, run through this:

  • Did I survey the job properly: access, condition, constraints, the customer?
  • Have I done a real take-off, with wastage and honest labour hours?
  • Have I added the hidden costs: waste, access, delivery, making good, my office time?
  • Have I added overhead recovery for the days the job will take?
  • Is my own wage in there, separate from profit?
  • Do I know my break-even figure, the floor I won't drop under?
  • Is my markup set to deliver the margin I actually want to keep?
  • Is there a contingency or provisional sum for what I genuinely can't see yet?
  • Have I added VAT and any CIS treatment correctly on top?
  • Is the scope written down, with a clear way to price any extras as variations?

Stop pricing in your head.
Let TradeDraft do the maths.

TradeDraft builds the price up exactly like this: complete cost, overhead recovery and profit. A live Margin Health check warns you before you ever quote below break-even. VAT, CIS and the Reverse Charge are worked out too. Free for 14 days, no card needed, then £29/month or £290/year, cancel anytime.

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More free guides

Getting Paid On Time →Deposits, staged payments and chasing what you're owed when an invoice goes unpaid. VAT & CIS Guide →VAT rates, the Domestic Reverse Charge and CIS, explained without the jargon. All free guides →Every TradeDraft guide in one place: pricing, quoting, VAT, CIS and getting paid.

This guide is general information for UK tradespeople, current to the best of our knowledge in 2026. It is not financial, accounting or legal advice, and the figures used are illustrative examples only. How you should price depends on your own costs and circumstances, so run your own numbers, and confirm anything significant with a qualified accountant. TradeDraft accepts no liability for decisions made on the basis of this guide. Questions: hello@tradedraft.co.uk.

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