E-BOOK
Pricing a Job for Profit
Day rates, materials, variations, retention and cash. Why profitable trades run out of money, and what to change. Eight chapters, about ten minutes, mostly arithmetic honestly done.
- Eight chapters, ending in six things to change on Monday
- Why 260 working days is the wrong denominator
- The difference between a markup and a margin, both ways
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Who this book is for
Trades who are busy, quote carefully, and still cannot work out where the money goes between the job going well and the year ending badly.
You priced your day rate off what others charge
Start with what you need out of the year instead. A year has 260 working days and once holiday, sickness, quoting and weather are out it is nearer 200. The same target over 199 days is £281 a day rather than £215, and quoting the lower one leaves you £13,138 short even if you bill every day you have.
You add a percentage to materials and call it margin
A markup is measured on what the materials cost and a margin on what you charged. Ten per cent added is 9.1 per cent kept, and to make a 20 per cent margin you have to add 25. The error always goes the same way, and on a materials-heavy job it is most of what you thought you were making.
You do the extras before you price them
The customer asks while you are on site, it will only take an hour, and by invoice day nobody remembers what was agreed. A job can hit its quoted margin exactly and still lose money, because the quoted work was priced and the extra work was not.
FACTS
A callback does not cost the hours it takes
Two hours on site plus an hour and a half travelling comes to about £177 once the chargeable time it displaces is counted, and £123 of that is time nobody invoices. Three a month is £6,365 a year. That is what it is worth spending to avoid one.
199 days
What a 260 day year actually bills
9.1 per cent
What a ten per cent markup actually keeps
FACTS
Retention has to be grossed up if you price it in
On a £120,000 contract at five per cent, half released at six months and half at eighteen, financed at ten per cent with fifteen per cent never recovered, the cost is about £1,410. The uplift that leaves your profit whole is £1,427, because whatever you add gets retained too.