Giving a good service at a reasonable price is key to winning work, but be careful not to sell yourself short. Back to Insights
It is important to remember the basics when reaching your final price, they are:
Sounds simple, but don’t be fooled, getting a handle on these elements can cause a headache for small businesses operating in the trades, which is why organisation is key!
The first step starts on site
Meeting the customer, and taking a close look at what needs to be done is crucial to successfully pricing (and winning) a job. Get yourself in a routine, and remember:
- Show your ID
- Keep labour costs in mind
- Take accurate measurements
- Listen to the customer
- Make a good impression
What is the price of labour?
You should start by working out your hourly rate, and checking your calculations against what other tradespeople are charging in your area, just to make sure you’re not wildly off the mark. Working out how much time a job will take is also key, concentrate on remedial tasks, like lifting and relaying floorboards, and don’t forget to factor your time spent travelling to and from work! Before you agree a price, it is a good idea to identify whether you will need to call on other trade professionals to complete the work, for example asbestos removal; always check the cost of their service first.
Apart from cost of labour, what else should I consider?
You need to explain to your customers what materials are required to complete their work and how much they cost. Don’t forget that you will have to pay for the materials up front, so you may want to think about getting a deposit from the customer. It is helpful to build a good relationship with your local wholesaler to source materials for trade prices.
Does it make a difference to the price if I’m VAT registered?
If you are VAT registered, you need to add it to the goods and services you provide. You can find out more about how VAT works here: : https://www.gov.uk/vat-businesses/how-vat-works
For more information on how to effectively price (and win) a job, whilst maximising your profits download our free Business Guide to Pricing Jobs.