Price the job, not the hour

Hourly-rate thinking feels safe because the maths is easy: hours worked times a number that sounds fair down the pub. The trouble is that the number usually covers your wage and nothing else. The van, the tools, the fuel, the insurance, the certs, the phone, the accountant and the weeks that do not fill all have to come from somewhere, and if they are not in your price, they come out of your wage.

What an hour actually costs you

Start with a year, not an hour. Add up everything the business spends before you earn a penny: vehicle and fuel, insurance, tools and their replacements, certifications and renewals, phone, software, workwear. Then count the hours you can truly bill. A 40-hour week rarely holds 40 billable hours; once driving, quoting, supplier runs and paperwork take their share, 25 is a more usual working assumption. Divide the first number by the second and you have your overhead per billable hour, which every quote must recover before margin even enters the room.

Build the quote in four layers

Every job price is four numbers added together: materials with a handling uplift (finding, collecting and guaranteeing parts is work), labour at your real rate, a share of overheads for the hours involved, and a margin you chose on purpose. Margin is not greed; it is what pays for the week the van needs a clutch. The worked example below uses middle-of-the-road numbers for a plumber charging £50 an hour.

If £235 for a fan swap makes you wince, run the alternative: charge “a couple of hours at £50” and you have recovered no overheads, no handling and no margin. You did the work and the business earned nothing. That is the day-rate trap in miniature, and it scales badly: a full diary of underpriced days is not a healthy business, it is a busy one.

Minimums, day rates and walking away

Small jobs need a minimum charge, stated without apology, because a 20-minute washer swap still costs you a slot, a drive and a stocked van. Most established trades run one, and many fold it into a call-out fee that includes the first hour. Some jobs you should also price to lose: the budget is not there, the spec moves daily, or the customer is collecting quotes like coupons. A polite no costs you one afternoon. A bad job costs a month and a review.

Pricing right is half the battle; the other half is a quote the homeowner can say yes to, which is a writing job as much as a maths job: restate the problem, itemise the work, name exclusions, put a date on it, send it the same day. Both sit inside the wider loop of running a small trade business well, mapped in the Tickover trade playbook. And if the money arrives late even when the price was right, start with payment terms on the quote — deposit, stage payments, invoice on completion — rather than stronger chasing after the fact.