How To Price Your Jobs, Tradies
How To Price Your Jobs
There are many ways tradies and builders price their jobs. I’m not talking here about fixed price quoting vs cost plus or hourly rate work. I spoke about that last week and the week before that. This week I’m talking about how to build a system for pricing up jobs.
A system for pricing up your jobs:
- Takes the guesswork out of the process;
- It makes it so that you price jobs consistently so that you can delegate the estimating or quoting to someone else in your business, as you grow, rather than it having to be you who does the quoting.
Ultimately, I want you to have a price book (or a price worksheet or spreadsheet) with clearly written rules about how a price or a rate gets applied to a job you’re quoting.
Why You Need To Set up Systems When You Do Your Pricing
Now some people find this obvious and are already doing it. Some people think it sounds difficult or risky or think it will be very difficult to systematise pricing because every job is different.
I worked with a guy once who couldn’t get his head around it at all. He’d say, ‘I just look at the job and I know how much to charge for the framing or the floor polishing or painting or whatever’, and I could not make him translate that into what process he followed to get there.
Recommended Reading: Why You Shouldn’t Work On Time And Materials Or Hourly Rate Basis
But, if you can write down the process and build the pricing book, you don’t have to be the one doing all the quotes, do you? My mate, unfortunately, is stuck doing his own quotes still.
I work with a builder who finds it difficult too. He’s fine with the other trades and his margin and he’s fine with materials but he struggles with committing to a figure for carpentry labour. His system, at the moment, is to make an estimate of how many days or weeks it will take one of his crews of carpenters to do the job. That’s not unreasonable but it’s difficult when there are unknowns, isn’t it? And it still has to be him, doesn’t it? He can’t easily delegate that estimating to someone else.
Table of Rates or Pricing Book
The other end of the spectrum is the super simplified table of rates. And this is where I’m trying to steer you, to where you have a table of rates that you apply to a job or the drawings of a job. This is where I meet a lot of resistance from people. They say things like, “but it’s too variable, my trade is too variable” or “It’s okay for new-build builders to price like that but for renovations, there are too many variables, too much unpredictability”. They’re really saying, “there’s too much chance I’ll get it wrong and cost myself money or build in too much contingency and price myself out”.
And of course, what that really translates to is, “A very simple rates sheet like the one you’re describing or the one I’m picturing now, exposes me to too much risk and I don’t like it”.
And fair enough, your price book needs to be flexible enough to accommodate the variables in your trade. But you can have one, you can build one and use it and refine it with manageable risk and you can get to a point where you have a pricing system – which is what you want, which is what will help you grow and make more money.
If I’ve persuaded you that a price book is worth building, I’ve done a good thing.
There are four ways you can engage with me:
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3. Attend my next Tools Down workshop.
4. Book yourself a 10-minute chat with me. We’ll talk about whether coaching is right for you now and if it is, we’ll go further into the process before you have to make your mind up.
See you later.