Pricing Resource Center

Price your jobs like you mean it.

The full pricing playbook for service businesses — labor rates, markup, estimating, deposits, and how to raise prices without losing customers.

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Pricing Fundamentals

Markup vs margin, cost-plus vs value-based, and the labor-rate formula every service business needs.

Markup vs Margin: The Difference (With Examples)

Markup is what you add on top of cost; margin is what you keep out of the price. A 50% markup is only a 33% margin. Confusing the two is the most common reason small service businesses underprice jobs.

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Cost-Plus vs Value-Based Pricing: Which Wins?

Cost-plus pricing adds a fixed margin to your costs — predictable, defensible, but caps your upside. Value-based pricing charges what the outcome is worth to the customer — higher ceiling, but requires discovery and confidence. Most successful service businesses use cost-plus as a floor and value-based on premium jobs.

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How to Calculate Your Labor Rate (The Real Number)

Your billable labor rate is roughly 2.5–3× the tech's wage. Start with the wage, add payroll burden (25–35%), divide by billable utilization (60–70%), then add overhead absorption and target profit. Skipping any layer is why most shops feel busy but broke.

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Hourly vs Flat-Rate

Trade-offs between hourly and flat-rate pricing, and when to charge trip and diagnostic fees.

Hourly vs Flat-Rate Pricing: Which Makes More?

Hourly billing protects you on unpredictable work but punishes you for getting faster. Flat-rate pricing rewards skill and lets you charge for value instead of time. Most service trades make more money on flat-rate once they have enough job history to price accurately.

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Trip Fees, Diagnostic Fees & Minimum Charges: When and How

Charge a trip fee any time you have to drive to a job — typically $45–95 depending on market. Waive it when the job goes ahead. Charge a separate diagnostic fee ($75–150) for troubleshooting work where the answer is the deliverable. Minimum charges protect you on tiny jobs that still consume a half-day.

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Estimating Jobs

How to quote a job, what to include, deposits, and the legal difference between estimate and quote.

How to Quote a Job: A Complete Estimating Guide

Quote a job in six steps: lock the scope in writing, list every line item separately, add 10–15% contingency for surprises, attach payment terms and a validity window, present the quote in person or by phone, and follow up within 48 hours if it goes unanswered.

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How to Price a Job: From Costs to Final Number

Price a job by adding direct costs, labor at your loaded rate, overhead absorption, and target margin — then adjust up for urgency, scope risk, and customer-specific value. This is the same five-step process whether the job is $300 or $30,000.

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Estimate vs Quote: Why the Word You Use Matters

An estimate is a good-faith ballpark and can legally change as scope clarifies. A quote is a binding offer at a fixed price. Use 'estimate' for unknown-scope work where final cost depends on what you find; use 'quote' for defined-scope work where you can commit to a number.

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Deposits for Contractors: How Much and How to Ask

Standard deposit is 25–50% on jobs over $1,000, payable at contract signing. Use it to buy materials and lock the customer in. Some states cap residential deposits (California: 10% or $1,000, whichever is less). Always disclose the deposit amount in the quote, not at the doorstep.

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Raising Prices

How to raise prices without losing customers — timing, amount, and the scripts that work.

How to Raise Prices Without Losing Customers

Raise prices 5–10% annually as a baseline; 15–25% if you have been holding rates for multiple years. Announce 30–60 days in advance, lead with the value not the cost, and grandfather a small set of strategic customers for goodwill. Done right, you keep 90%+ of customers and immediately improve margin.

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