Underpricing is the most common quoting mistake. It wins the job and loses the money. Build every price from the same four parts.
1. Materials
Cost every item, add a waste allowance (typically 5–15% depending on the material) and add delivery. Many trades add a handling margin on materials to cover ordering and collection time.
2. Labour
Estimate the hours honestly, including setup, cleanup and travel, and multiply by your rate. Your rate must cover more than wages: it has to pay for unbillable time such as quoting, admin and travel.
3. Overheads
Insurance, vehicle, tools, software, phone and accounting. Divide your annual overheads by your billable hours to get an overhead cost per hour, and make sure your rate covers it.
4. Profit
Profit is not the same as your wage. Add a margin on top, often 10–20%, so the business can absorb mistakes and invest.
A worked example
| Part | Calculation | Amount |
|---|---|---|
| Materials | £900 + 10% waste + £40 delivery | £1,030 |
| Labour | 22 h × £45 | £990 |
| Overheads | 22 h × £9 | £198 |
| Subtotal | £2,218 | |
| Profit | 15% | £333 |
| Quote price (ex. VAT) | £2,551 |
Round sensibly and present it in the quote tool as clear line items rather than one number.