How do you go about pricing your services for profit?

When you are in the warranty service and have multiple manufactures changing their prices substantially for parts multiple times a year do you change your prices across the board or only with those company with part increases. I'm finding it hard to find balance between their terms and unity across our company?

I'm an odd ball in that I mostly work on a time & materials for my handyman services. I know some handymen are moving toward fixed pricing, but I prefer the flexibility of hourly work. I give estimates, but still bill out hourly. So, to answer the question, my profit is built into my hourly amount. 

In its most simple form, start with how much money YOU want to takeaway from each service/job you provide. From there reverse engineer how much you need to markup your DIRECT COSTS and OVERHEAD to meet that takeaway number. 

Without being greedy, make sure you are only accepting assignments that are paying you what you are worth!

It's important to do an After Action Report- How do you know how much you need to charge if you don't know if the previous job was profitable? Reviewing each job, assessing it's worth in Time, Materials, and Labor may change your perspective on how much you should be charging. It may not be one or two jobs, but do the same project 3 times and see if it was really worth your while at that price point. 

I think staying on top of your expenses overhead/operating/labor costs and crafting a good man hour rate from that coupled with being as detailed and thorough as possible when creating quotes is best for ensuring profitability. 

We have always stuck to our guns in terms of pricing when it comes to quotes to clients no surprises costs but it works in our industry, if there is something that is outside the scope of our quote that comes up during a project it is quoted additionally so there are no surprises. Our business thrives on re-occurring jobs with our clients whether it is weekly, monthly or annually. 

Over time it's not uncommon to raise prices to match inflation. Good communication to clients will handle that.

For setting price points - Different industries have different profit margins. Setting the price is a tough one. You don't want to be too high or too low and obviously have a profit margin that is sustainable. The lowest hourly charge i've found sustainable in any business has been $60 per person. Other businesses have higher minimums. This is my personal experience. 
We personally priced our Dog Poo Pickup service to be the highest price in the market for the pay as you go packages. And the cheapest in the market if someone pre pays for a year of service. This way the subscriptions not cover more than the cost to run the business on a monthly basis and the prepaid funds just collect in the back. This means we will never be in a deficit unless I make dumb financial decisions lol. 

You want to get the knowledge of what it costs to run your business and break that down to an hourly cost. including all your expenses not just the cost to do the job. Then you will see the true picture of the cost to run your business and you can decide what you need to charge to be sustainable.

Depending on the service industry you're typically looking at a range of 10%-35% profit margin. Do your market research to see what other services are charging and you will get your ball park price and can strategize from there what you want to do. 

Hi all. 

New here. Yay! all responses are good but I did not see anyway talk about the inflation percentage rate  to be considered. At one time I had the same problem. My CPA told me that I needed to add verbiage on my yearly contracts about the expectation of charging more when the inflation percentage rate would increase e.g. between an 2.5%-4.5% annually. So I try to look at %  to help me determine to prepare for an increase or not. 

Yess! This is part of every business, no matter what industry. 

I believe changing your pricing incrementally over time is the best route for home service businesses. They're too small for customers not to see changes, so best done over a period of time instead of all at once.

Example: Raise your mark-up on Labor AND Materials 5% every year

I think gradual increases are not uncommon.  People know that almost everything cost more money and those cost continue to rise.