blog-intro">You finished the job. The client's happy. You send the invoice — and somehow, you barely broke even.

That's not bad luck. That's bad pricing. And it happens to almost every trades contractor at some point.

This Isn't a Quoting Problem. It's a Cost Problem.

Most contractors who underprice their jobs think they have a quoting problem. They don't.

They have a cost problem. They don't actually know what it costs to run their business — so they guess. And they guess low, because they want to win the job.

Here's what I tell every client: you cannot price a job correctly until you know your true cost of doing business.

That means labour, materials, overhead, vehicle costs, insurance, tools, software, your own time — all of it. If you haven't mapped that out, your quotes are built on hope, not math.

If you're not tracking your numbers closely, start with understanding your profitability basics before you touch your pricing.

The Four Numbers Every Trades Contractor Needs to Know

Before you quote a single job, you need four numbers locked in.

1. Your fully-loaded hourly labour cost. This isn't just what you pay your guys. It's wages plus payroll taxes, WCB, benefits, and any downtime you're eating. For most trades in BC, this number is 25–35% higher than the base wage.

2. Your monthly overhead. Rent, insurance, accounting, software, phone, vehicle payments, fuel — add it all up. Divide by the number of billable hours you actually work each month. That's your overhead rate per hour.

3. Your materials markup. Don't pass materials through at cost. You're sourcing them, managing them, and taking on the risk if something goes wrong. A 15–25% markup on materials is standard and fair.

4. Your target profit margin. Not revenue — profit. After labour, materials, and overhead, what's left? For a healthy trades business, you're targeting 15–20% net margin. If you're not hitting that, your pricing is the first place to look.

We go deeper on this in the post on growing your profit margins — worth a read if your numbers feel tight.

Stop Pricing by Feel. Build a Pricing Formula.

Here's what most contractors do: they walk a job, picture it in their head, and come up with a number that "feels right."

Sometimes they're right. Often they're not. And there's no way to know until it's too late.

The fix is a simple pricing formula you use on every job:

Job Price = (Labour Hours × Fully-Loaded Rate) + (Materials × Markup) + Overhead Allocation + Profit Margin

That's it. Build it into a spreadsheet. Build it into your quoting software. But build it — and use it every single time.

If you want this to run consistently across your team, this is exactly the kind of thing that belongs in your standard operating procedures. Your pricing process shouldn't live in your head.

The Mistake That Kills Margins: Not Accounting for Non-Billable Time

Here's the one that gets almost every contractor.

You have 8 hours in a day. But how many of those are actually billable? Driving to the job, picking up materials, doing quotes, answering calls, fixing a supplier issue — none of that gets invoiced.

If 6 out of 8 hours are billable, your overhead rate calculation needs to reflect that. You can't spread your overhead across 8 hours if you're only billing 6.

Run the real number. It will feel uncomfortable. That's the point.

This is also why understanding your burn rate matters so much — you need to know what you're spending just to keep the doors open before you can price profitably.

Should You Charge T&M or Fixed Price?

Time and materials (T&M) billing protects you on unpredictable jobs. Fixed price is easier for clients to say yes to.

Here's how I advise clients to think about it:

• Use fixed price when the scope is clear and you've done similar jobs before. You know your numbers, you can quote confidently, and the client appreciates the certainty.
• Use T&M when there are too many unknowns — older buildings, renovation work, anything where the walls might open up and surprise you.
• Use a T&M cap as a middle ground. You bill actual time and materials, but set a ceiling. Clients feel protected, and you're not absorbing scope creep.

Whichever model you use, document it clearly in your quote. Scope creep is the silent margin killer in trades work. The more specific your quote, the easier it is to charge for extras.

We covered this in the post on profitably costing jobs — it's one of the most-read pieces on the site for a reason.

When to Raise Your Prices

If you're winning more than 70–75% of your quotes, you're probably priced too low.

That sounds backwards. But think about it — if almost everyone is saying yes, you have room to charge more. A healthy close rate for a trades contractor is somewhere between 50–65%. You should be losing some jobs on price.

Raise your rates in small increments — 5–10% at a time. Test it on new clients first. Watch what happens. Most contractors are shocked to find that the right clients don't push back at all.

The clients who only care about price are usually the ones who cause the most problems anyway.

What to Do This Week

1. Calculate your fully-loaded hourly labour cost for every person on your crew — including yourself.
2. Add up your monthly overhead and divide by your actual billable hours to get your overhead rate per hour.
3. Set a materials markup percentage and apply it consistently — 15% minimum, 25% if you're managing procurement.
4. Build a simple pricing spreadsheet that uses the formula above. Use it on your next three quotes.
5. Look at your last five completed jobs. Calculate what you actually made versus what you quoted. The gap will tell you everything.
6. If your close rate is above 75%, raise your prices by 8% on the next ten quotes and track the results.

If your pricing feels like guesswork right now, that's fixable — it just takes the right systems. At TradeBrain, we help trades contractors build the financial clarity and operations management processes that make pricing — and profitability — repeatable.

If you're ready to stop guessing and start pricing with confidence, reach out and let's talk.