Start with what you need to earn
Work out how much you need to take home, then add everything it costs to run the business: van, fuel, tools, insurance, accountancy, phone, tax, holidays and sick days. Divide by the number of days a year you can realistically sell. That gives you a minimum day rate. Most tradespeople find they can sell far fewer days than they first assume, once travel, quoting, admin and gaps between jobs are counted.
Add up the job
- Labour: the time the job will take, multiplied by your rate
- Materials: what you need to buy, plus delivery
- Extras: skip hire, parking, permits, disposal, specialist equipment
- Travel and set-up time if they are significant
- A contingency for the unexpected, especially on older properties
A worked example (illustrative only)
Suppose a bathroom refit will take 4 days. Your day rate is £250, so labour is £1,000. Materials cost you £900. Skip hire and disposal are £120. That is £2,020 in costs before any margin for the unexpected. Adding a 10% contingency gives about £2,220. If you are VAT registered, add VAT on top. Your numbers will be different, and so will your day rate.
Materials: markup or pass-through?
Some tradespeople add a markup to materials to cover the time and cost of sourcing, collecting and carrying them. Others charge at cost and cover that in their labour rate. Either can work. What matters is being consistent, being able to explain it, and being honest in your quote.
Hourly, day rate or fixed price: when to use which
| Method | Works well when | Risk |
|---|---|---|
| Hourly rate | The job is small or open-ended | Customers worry about the final bill |
| Day rate | Work is spread over days and the scope is flexible | Slow days cost you, quick days cost them |
| Fixed price | The scope is clear and you can see the whole job | You absorb the risk if it takes longer |
Your overheads: a simple list
- Van: finance or depreciation, insurance, tax, fuel, servicing
- Tools and equipment: purchase, repair and replacement
- Business insurance
- Phone, software and accounting
- Training and registration fees
- Marketing: card printing, signage, website
- Unpaid time: quoting, admin, travel and gaps between jobs
A second worked example: a small repair (illustrative)
A tap and valve replacement takes about 1.5 hours including travel and parking. At a rate of £50 an hour, that is £75 in labour. Parts cost £18. A fixed price of about £95 covers it with a small margin. If you were also called out at short notice, a call-out charge might apply. Your own rate and costs will differ.
Raising your prices
Tell regular customers in advance, with a short, polite message: "From [date] my rates are changing to [new rate] because my costs have gone up. Thank you for your continued trade." Most customers accept a fair rise. Review your prices at least once a year.
Common mistakes
- Pricing against the cheapest quote you hear about instead of your own costs
- Forgetting unpaid time: quoting, driving, admin and ordering
- Not allowing for problems behind walls and under floors
- Pricing a job in your head and not writing the breakdown
- Never raising your prices
When a customer says it is too expensive
Do not simply drop the price. Explain what is included, offer to reduce the scope, such as fewer features or a lower specification, or let them go. Being the cheapest is a hard way to run a business.
Common questions
What is a fair day rate?
It depends on your trade, area, experience and costs, so there is no single figure. Work out yours from your own costs and the day rates in your local market.
Should I charge for call-outs?
Many tradespeople do, especially for emergencies and small jobs. If you do, state it clearly before you attend.
How often should I review my prices?
At least once a year, and whenever your costs rise significantly.
Should I show prices on my website?
It is up to you. Many tradespeople show a call-out fee or a 'from' price for common jobs, and quote the rest after seeing the work.
Should I match what other tradespeople charge?
Use them as a check, not a target. Your costs, quality and demand are your own.
How do I know if I am too cheap?
If you are always fully booked, never lose a quote and still struggle to pay yourself, you are probably too cheap.
Is it fair to charge for time travelling?
Many tradespeople include travel in their rate or call-out charge. Be clear about it before the job.
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