How to Price a Job
A Builder's Guide to Quoting with Confidence

Underquoting is one of the most common reasons small building businesses struggle. It usually comes down to the same set of errors - guessing material costs, forgetting overheads, and pricing labour too cheaply. This guide walks through a reliable process for building a quote that covers your costs and leaves a proper margin.

The Five Components of Any Job Price

Every quote you send should account for all five of these. Miss any one of them and you are effectively discounting your own work.

1. Materials - everything that ends up on or in the job
2. Labour - your time and any sub-contractors
3. Plant and equipment hire - scaffolding, machinery, tools
4. Overheads - van, fuel, insurance, phone, admin time
5. Profit margin - what the business actually makes

Step 1 - Price Materials Accurately

Never guess material quantities. Take off every item from the drawings or from a site visit, calculate quantities properly, and get current prices from your merchant - not prices from memory or last year's job.

Add a waste allowance to every material line. The percentage varies by material type:

• Brickwork and blockwork: 5-10%
• Floor tiles and wall tiles: 10-15% (more for diagonal patterns)
• Plasterboard: 10%
• Timber: 10-15% depending on cutting complexity
• Render and plaster: 10%

Step 2 - Cost Your Labour Honestly

Many builders price labour at their day rate without accounting for realistic productivity. A full day on site is rarely 8 productive hours once you account for travel, loading out, cleaning up and any snags.

A safer approach is to estimate the number of days task by task, then multiply by your fully loaded day rate. Your fully loaded day rate should include:

• Your target take-home pay
• Employer NI contributions if you have employees
• A proportion of annual sick days and holidays
• Any sub-contractor mark-up

Step 3 - Include Plant and Prelims

Scaffolding, skip hire, tool hire, temporary electrics and site welfare all have a cost. These are called preliminaries (or prelims) and are frequently omitted from smaller quotes. Even a simple extension job can rack up £500-1,000 in prelims that never get charged.

Step 4 - Apply Your Overhead Recovery

Your overhead costs - van finance, insurance, phone, accountant, advertising, PPE - need to be recovered across all the chargeable jobs you complete each year. A simple approach: add up your annual overhead costs and divide by the number of chargeable days you work. Add that figure to your daily cost before you calculate margin.

As a rough benchmark, overheads for a sole trader builder typically run at 15-25% of turnover.

Step 5 - Add Your Profit Margin

Profit is not the same as mark-up. If your costs are £10,000 and you add 20% mark-up, your price is £12,000 and your profit is £2,000 - which is actually a 16.7% profit margin, not 20%.

Most building contractors aim for a net profit margin of 10-20% depending on job type and competition. Specialist work or work with high programme risk warrants a higher margin.

Presenting Your Quote

A well-presented quote wins more work than a scribbled number. At minimum your quote should include:

• A clear description of the works included
• What is specifically excluded
• A payment schedule (deposit, stage payments, final payment)
• A valid-until date (material prices change)
• Your terms and conditions

Clients comparing multiple quotes are more likely to choose the one that reads professionally and gives them confidence you know what you are doing.

When to Walk Away

Not every job is worth having. If a client is pushing your price below your cost plus a reasonable margin, the job will cost you money. It is better to have empty time than to be on a job that is losing money while better opportunities pass you by.