How to price a job when you are starting out

Work out your real hourly cost first — including unbillable time — then price the job, not the hours.

The beginner error is dividing a desired salary by 2,000 hours. You will not bill 2,000 hours. Quoting, travelling, chasing payment and admin are unbillable, and they are easily a third of the week.

Once you know your true cost per billable hour, estimate the job in hours and price it as a fixed figure. Clients buy outcomes, and a fixed price is easier to say yes to than an open meter.

The arithmetic everyone gets wrong first

Take a desired income, divide by 2,000 hours, call it an hourly rate. It is wrong because you will not bill 2,000 hours. Quoting, travelling, buying materials, chasing payment, doing your books and the days with no work are all unbillable, and together they are easily a third of the week.

Work from billable hours instead. If you realistically bill 1,200 hours a year, your rate has to cover your whole income and costs across 1,200 — not 2,000.

Build it from the bottom

1. The income you need, after tax, to live.
2. Gross it up for tax and social contributions — often 25–35%.
3. Add business costs: vehicle, tools, insurance, phone, software, accountant, training.
4. Add holiday and sick time, because nobody pays you for either.
5. Divide by realistic billable hours.

The number that comes out is usually higher than people expect, and it is the floor rather than the price.

Then price the job, not the hours

Use the hourly figure to check your own economics; quote a fixed price to the customer. Clients buy outcomes, a fixed price is easier to say yes to than an open meter, and hourly billing punishes you for getting faster at your own trade.

Check it against the market

Your costs tell you what you must charge. They say nothing about what anyone will pay. Find out what comparable work goes for locally — trade groups, competitors' published prices, asking other trades. If your calculated floor is above the market, the answer is a different market or a different service, not hoping.

Do not price low to get started

It is the most common opening mistake. Low prices attract the most price-sensitive and most demanding customers, they are very hard to raise later with the same clients, and they signal inexperience to everyone else. Competing on being new is a weak position; competing on turning up, quoting quickly and finishing properly is not.

Record actual against quoted

For every job, note what you quoted and what it really took. After a year you will see exactly where you underprice — usually one or two job types, consistently, rather than everything. That single record is worth more than any pricing advice, because it is about your work rather than the average.

Raise prices on new customers first

Much easier than renegotiating with existing ones. Quote the new rate on the next enquiry and see what happens. If the conversion rate holds, the price was too low. Existing clients can follow at a natural point — a new project, an annual review — rather than through an awkward conversation about an increase.

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