How to Price a Job as a Tradesman: Stop Undercharging

Are You Leaving Money on the Table?

Here's an uncomfortable truth: most tradesmen undercharge when they start out. Fear of losing work, not knowing the market, wanting to seem competitive - I get it. But undercharging doesn't just hurt your wallet, it devalues the trade and makes it harder for everyone.

Let's fix your pricing.

Know Your Actual Costs First

Before you can price jobs, you need to know what you actually cost per hour. Not what you'd like to earn - what you MUST earn to stay in business.

Calculate your annual costs:

• Van costs (payment, insurance, fuel, maintenance): £6,000-10,000
• Tools and equipment replacement: £1,000-3,000
• Insurance (public liability, tools, etc.): £500-1,500
• Phone, admin, accounting: £1,000-2,000
• Marketing and website: £500-2,000
• Materials not charged to jobs: £500-1,000
• Training and certifications: £200-1,000

Typical total: £10,000-20,000/year just to operate

Working Out Your Day Rate

Let's say you want to earn £40,000/year after costs, and your costs are £15,000.

The maths:

• Total needed: £55,000
• Billable days (realistic): 200 days (accounting for admin, quotes, weather, illness)
• Required day rate: £275/day minimum

That's BEFORE any profit margin for growth, before any pension contributions, before any buffer for quiet periods.

Realistic minimum day rate for a sole trader: £250-350

Why Hourly Rates Are Misleading

A £30/hour rate sounds decent until you realise:

• Travel time often isn't charged
• Quote time isn't charged
• Small jobs have setup time eating into hours
• 8 hours on site rarely means 8 billable hours

If you're charging £30/hour, you're probably actually earning £15-20.

Pricing Different Job Types

Small jobs (under half a day):

• Minimum callout charge essential - £80-150 depending on area
• Don't charge hourly for small jobs, you'll always lose
• Fixed prices for common small tasks

Day jobs:

• Day rate + materials + markup
• Standard 10-20% markup on materials is normal and expected

Quoted project work:

• Calculate time realistically (add 20% contingency)
• Materials + labour + contingency + profit margin
• Fixed quote protects both parties

The Markup on Materials Debate

Some customers think they should pay trade price for materials. They're wrong.

Your markup covers:

• Your time sourcing and collecting materials
• Your trade accounts that took time to establish
• Fuel to merchants
• Wastage and returns handling
• Warranty you provide if materials fail

Standard and fair markup: 10-25% on materials

How to Raise Your Prices

Already established with existing customers? Here's how to increase:

• New customers get new prices immediately
• Existing customers: honest conversation at natural break point
• "My costs have increased and I need to adjust my rates from X to Y"
• Most good customers understand - they've had to raise their prices too
• Customers who leave over reasonable increases aren't profitable anyway

Red Flags When Pricing

Watch out for:

• Customers who immediately accept without question (you're too cheap)
• Customers who haggle aggressively before you've even started
• "Can you do cash?" as a way to get discount
• Comparing you to unrealistic online quotes

The Bottom Line

Good work deserves good pay. Quality tools like DeWalt and Makita cost money. Your van costs money. Your skills took years to develop. Price accordingly.

The tradesmen who thrive aren't the cheapest - they're the ones who do quality work at fair prices and aren't afraid to value their time.