How to price a job when you’re a new contractor

Underpricing is the fastest way to go out of business. When you’re new, the temptation is to win work by being cheapest — but a job priced below your true cost costs you money to complete. Here’s a straightforward way to price so you stay profitable.

Start from your real costs

• Labor — your (or your crew’s) fully-loaded hourly cost, not just wages.
• Materials — with a little waste factor built in.
• Equipment, disposal, and permits.
• Overhead — insurance, vehicle, phone, software, and your time quoting and managing.

Add markup — not just a “margin”

Markup covers overhead and profit. A common mistake is confusing markup with margin: a 20% margin requires roughly a 25% markup on cost. Decide the profit you need to grow, and apply it consistently rather than guessing per job.

Don’t compete on price alone

You rarely win by being the cheapest — and if you do, you often win the wrong customers. Win on clarity and professionalism: a transparent, itemized quote and a polished proposal make a new contractor look established and justify a fair price.

Quote faster and look bigger than you are

DoneDeal helps new contractors produce localized, itemized estimates and professional proposals in minutes — so you can charge what the work is worth and respond faster than the competition. Start free with 3 proposals a month.