Start with your costs, not a guess
Every profitable price is built the same way: figure out what the job costs you, then add what you need to earn. Guessing, copying a competitor, or pulling a number out of thin air might win the job and still lose you money, because you cannot know whether a price works until you know your costs.
The method below works for almost any trade. You will price the materials, estimate the labor, add a share of your overhead, and apply a markup for profit. The first few times it feels slow. After that it becomes a routine you can run on any job, and every estimate you send is backed by numbers you trust.
Step 1: Price the materials
List every material the job needs, down to the small stuff: fasteners, fittings, tape, blades, and disposal bags. Get real prices from your supplier rather than memory, because prices move. Then add a little for waste, cut-offs, and delivery so you are not paying for materials out of your own pocket.
Tip: keep receipts or a supplier price list on your phone. Material prices change often enough that last year's number is not a safe guess.
Step 2: Estimate the labor
Break the job into tasks and estimate the hours for each: prep, the work itself, cleanup, and drive time. Be honest about how long things actually take, including the trips back for a part. Multiply the total hours by your loaded hourly cost, which is your wage plus what it costs the business to have you on site.
If you do not have a loaded hourly number yet, work through how to calculate your hourly rate first. It walks you through salary, overhead, and realistic billable hours.
Step 3: Add your overhead
Overhead is everything the business pays for that no single job covers: insurance, the truck, tools, phone, software, advertising, and the hours you spend quoting instead of billing. Every estimate needs to carry a fair slice of those costs, or you are quietly subsidizing your customers.
A simple version: take your annual overhead, divide it by your billable hours, and add that amount per hour to the job. The full method is in contractor overhead and profit.
Step 4: Add profit with a markup
Costs keep the lights on; profit is what makes the business worth running. Apply a markup on top of your total cost. Many contractors work somewhere in the range of 10% to 30% depending on the trade, the risk, and how busy they are, but the right number is the one that covers your goals, not someone else's.
Markup is figured on cost, which is different from margin, figured on the selling price. Mixing the two up is one of the most common pricing mistakes in the trades, so read the contractor markup guide if you are not sure which one you are using.
A worked example with round numbers
Say you are pricing a small repair job. The numbers below are hypothetical, chosen only to show the math:
| Cost item | Amount |
|---|---|
| Materials, including waste and delivery | $500 |
| Labor: 10 hours at a $50 loaded hourly cost | $500 |
| Overhead: 10 hours at $10 per hour | $100 |
| Total cost | $1,100 |
| Markup at 20% (profit) | $220 |
| Price to the customer | $1,320 |
Check the order of operations
Notice the order in that example. You did not start at $1,320 and hope it worked. You built up from real costs, so you know exactly how much of the price is materials, how much is your time, and how much is profit. If the customer pushes back, you can defend the number line by line instead of caving.
Present the number like a professional
A price built this carefully deserves a clean presentation. An itemized estimate shows the customer what they are paying for, states how long the price is valid, and gives you something to point back to if the scope changes. If you are new to the format, start with how to write an estimate.
EstimateBook is built for exactly this step. Describe the job by voice, text, or photo and the app drafts itemized line items. You adjust the quantities, prices, and a global markup until the numbers match your real costs, then share the result as a polished PDF. The draft is a starting point; the final numbers are always yours to review before anything goes to the customer.