How do you build rates that protect your margin?
Build every rate from its parts: the labour time the job really takes, the materials at today's prices, a share of your firm's overheads — rent, vehicle, phone, licences — and an allowance for waste and breakage. A rate built this way can be checked, defended and adjusted; a rate copied from a competitor or remembered from two years ago cannot. This guide teaches the method. The numbers are yours — no honest guide can hand you a “typical margin”, because your costs are not typical.
What goes into one rate?
Take any line you sell — a point wired, a metre tiled, a unit serviced — and walk its true cost before you set its price:
- Labour: the hours the work honestly takes, including setup, travel between jobs and tidying — at what those hours cost you per man, salary and all.
- Materials: every item the line consumes, at the price you actually pay today, not the price from the last project.
- Overheads: your monthly fixed costs — rent, vehicle, fuel, phone, licences, insurance, tools — divided across the hours you can actually bill. This share belongs inside every rate, or it comes out of your margin.
- Waste and breakage: tiles cut wrong, a fitting damaged, the return trip for a forgotten part. A small allowance on every rate beats a disaster absorbed on one job.
- Then, and only then, your margin — the part that pays for slow months, growth and your own wage as the owner.
How do overheads get into a rate?
Add up one month of the firm standing still: everything you pay even if no job runs. Divide it by the billable hours your crew can realistically sell in that month — not the hours they are present, the hours that end up on invoices. The result is the overhead cost hiding inside each labour hour, and it is usually the number that explains why a “busy” firm ends the month short.
Review the build-up whenever a big input moves: a salary change, a rent increase, a materials jump. A price book is not a document you finish; it is a set of numbers you re-check a few times a year, which is exactly why it should live in one place rather than in your head.
Where does the price book do its work?
Everywhere money is promised: the quote built from it on site, the variation priced from its rates, the AMC built from its visit costs. A firm with a maintained price book answers pricing questions in minutes, consistently, whoever builds the quote — see writing quotes that win for what the client sees.
In InstaJack, your price book is yours: your products and services, your sell prices, per job or per metre or per point — with cost price kept in your own book only, never printed on a quote or invoice. Each trade starts with a starter book you then make your own. InstaJack stores and applies your rates; it does not set them, and it will never tell you what your margin should be — that judgement is the business.
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What margin should I add on top of my costs?+
There is no honest universal number — it depends on your costs, your trade and the work you win at that level. Cover every cost first, then test prices against the market you actually serve. Any guide quoting a “typical margin” is inventing a benchmark.
Should my cost price appear on the quote?+
No. The client sees your sell price per line and the total. Your cost build-up — labour cost, materials cost, overhead share — stays in your own book. Showing it invites negotiation on your costs instead of agreement on the work.
How do I price a job I have never done before?+
Build it up as time and materials: estimate the hours honestly, list every material at today's prices, add the overhead share and waste allowance, then your margin. Afterwards, compare the estimate with what the job actually took and correct the rate in your book.
A competitor is cheaper — should I match him?+
Check his scope before his price: named specs, exclusions and what his paper actually promises. If his price is genuinely below your costed rate, matching it buys you a loss. Compete on a clearer quote and a complete scope instead.