Communicating cost increases to your clients aren't the easiest yet it has to be done as a business continues to grow. Thoughts?

Everything starts with building a budget! This budget is going to show you what margin you need to make to complete your budget goals at the end of the year. So if your budget is telling you that you need a 50% gross margin then now when you quote you know you need to at the very least add up your costs and double them. I would say if your budget says 50% then you are quoting around 60% gross margin. This give you a profit buffer for some bad jobs and things like team days and just general slippage. Get that gross margin as high as you can and you will be a very happy business owner.

Always explain reasons why and include your team as part of the driving force as usually they are!

Thanks for sharing such a detailed breakdown! I completely agree that starting with a solid budget gives you a clear direction on pricing. Your point about aiming for a higher gross margin to account for slippage and unexpected costs is spot on—it's great advice for avoiding surprises down the road.

price transparency 🤌 i love that. Not only does it foster understanding across your whole team but can potentially empower them, improve accountability, and increase satisfaction. 🙌

Remember that as your payroll went up, your value went up too. Your company is now more responsive ever with a dedicated office staff. More techs on the road means less scheduling glitches when one calls out. more trucks on the road means less hiccups should one break down. You may still offer the same service, but now you do so in a more responsive, reliable, and quicker way. if i was you client, i would pay more for that...

How do you go about pricing your services for profit?

56 Replies

StevenAllen
Contributor 2
23 days ago
As we are providing estimation services, I price for profit by accounting for labor, materials, overhead, and risk — not just what it takes to win the job. When costs go up, I show clients the numbers. Data makes those conversations easier.
StevenAllen
Contributor 2
23 days ago
Doing construction estimation services, I’ve learned you can’t guess your profit. You have to account for labor, materials, overhead, and risk upfront. When prices move, I communicate early and back it with data

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How do you go about pricing your services for profit?