The Profitable Tradesman

Most tradespeople understand that losing money on a job is bad. What many do not realize is how easily it can happen. You can perform excellent work, stay busy every day, have customers recommending your company, and still discover that there is not enough money left at the end of the month. The problem may not be your workmanship, employees, or number of customers. The problem may simply be that you are not charging enough.

Pricing is one of the most important skills a trades business owner can learn, yet many people enter business with very little training in how prices should actually be created. You may have spent years learning plumbing, HVAC, electrical work, carpentry, roofing, welding, appliance repair, automotive work, landscaping, construction, or another skilled trade without ever receiving much education about markup, margin, overhead, labor burden, break-even, or profit.

Then one day you start your own company and suddenly you are expected to know what everything should cost.

A customer asks how much you charge for a job, and you need an answer. You may begin by thinking about what your previous employer charged. You might call another tradesperson and ask what they charge. You might search online, look at competitors, estimate the materials, add the hours you think the job will take, add a little extra, and give the customer a number.

Sometimes that number works.

Sometimes it does not.