How do you go about pricing your services for profit?

Pricing restoration services can definitely be challenging because every project is different. Over time, we’ve learned to price based on labor, materials, pickup and delivery, complexity of the repair, and the level of craftsmanship required. We also had to learn not to underprice skilled trade work just to compete.For many commercial clients, replacing furniture is often more expensive than restoring it, especially when the furniture is custom-made or no longer available. As our business has grown, we’ve become more confident communicating price increases by focusing on the value we provide, the quality of the work, and the cost savings restoration can offer long-term

To price services for consistent profit, first calculate your fully loaded cost per job, including labor, materials, equipment depreciation, insurance, marketing, and vehicle expenses. Then apply a 40 to 60 percent gross margin to ensure overhead is covered and profit remains. Avoid hourly billing. Instead, offer fixed-price packages based on scope of work. Regularly review and adjust rates based on market conditions and actual job costs. This disciplined approach protects margins while delivering clear value to clients.

“I also utilize flat-rate pricing structures for common HVAC services to ensure consistency and transparency for customers.”

Good thread. On commercial electrical, our pricing has to absorb a lot more variability than a typical residential flat-rate model — so we've built ours around three layers:

1) Known cost floor — fully burdened labor (wage + taxes + WC + GL + vehicle + tools + non-billable time), material at landed cost with a waste factor, and a line for permit/inspection/coordination time. If you don't know your true burden, every "good" margin is an illusion.

2) Target gross margin, not markup. We aim for 35–45% GM on service and 20–30% on project work, and we back-check every completed job against that target. Jobber's job costing makes that loop a lot tighter than the spreadsheet gymnastics I used to run.

3) Annual escalator baked into the proposal language. Rather than shocking a client with a mid-year increase, our service agreements and multi-phase proposals include a fixed annual escalator (material index + labor COLA). Clients sign up knowing it's coming — no awkward conversation later.

On communicating increases: I've found framing matters. "Our rate is changing" lands badly. "Here's what's changed upstream (copper, conduit, controls, insurance) and here's how we're keeping the change small for you" lands fine — especially when you tie it to the value they're already getting (response time, cleanup, documentation, code compliance).

Every field’s a little different, but for us it’s all about knowing our real numbers. We price from the ground up: materials, labor, equipment, overhead, and a little buffer for unknowns. Labor is usually the biggest swing, so if you miss that, you lose money quick. Once we know our true cost, we stick to a margin that keeps the business healthy. If it doesn’t make sense, we pass.

On price increases, we just keep it real. Costs go up (materials, fuel, labor) and we explain it simply. No fluff. Most good clients get it, especially when you show up, communicate well, and do solid work.

Hi Iam new to this community. I run a landscape construction company in North Bay Ontario Canada. I’m in my second year of business and I find the most difficult issue with pricing jobs properly. Any pointers would be great.! 

I price projects internally at time and materials plus a size fee, then take it to my customers with 15-20% markup with timed explanations for each line item. My goal is to be at about 35-45% profit. 

I price my services by considering both the quality of my work and the convenience of being a mobile stylist. I factor in my costs, including products, travel, and time, to ensure every appointment is profitable. My pricing also reflects the personalized, one-on-one experience I provide in my clients’ homes. I stay mindful of my local market so my rates remain fair while still honoring my value. This approach allows me to maintain a sustainable business while consistently delivering high-quality service.

I built a calculator in excel that I can use to help me price my jobs. I have all my normal expenses, hourly rates, equipement costs, consummables, assets, my operating rates etc etc. Then all I need to do is enter my estiamate job time, and it gives me a job cost and a job price. Helps keep everything more consistant and profitable. I'm also not leaving as much profit on the table.

You need to know the cost of your materials, the time it will take based on your company previous projects, your employees or subcontractor cost. Then factor in misc. items and factor in your profit margin. Trip charges, dump fees and the insurance portion of this job. Set budget goals and let the homeowner upfront if there are issues that are unforeseen, will need to have a change order. Always go back and look at your previous projects that were similar and if you made a profit, check for material increases.