When Pricing Plumbing Jobs: Don’t Forget to Include the Profit
Whether you are charging $25 per hour or $110 per hour for labor–if you don’t know your costs you could still be losing money. One of the most important aspects of owning and running a profitable plumbing company is knowing the value of your work and the costs involved with simply keeping your doors open. Bidding based solely on under-bidding your competition’s pricing can leave you working your tail off for very slim profit margins.
Know the True Cost of Your Business
Often plumbers and tradesman look at job costing as a simplified equation:
Cost of Parts + Hourly Labor + Fair Profit Margin = Cost of the Job
However, this method of pricing jobs will burn them in a very short amount of time. There are so many other costs that go into running a business, and every job that is done needs to be covering a part of the overhead.
Some examples of other costs involved in a business are
- Administrative Costs
- Employee Wages & Benefits
- Taxes and Accounting
- Tool and Mechanical Repairs
- Vehicle Costs
- Retirement Savings
If you don’t know these costs, you can’t plan for profit!
When using the simplified equation above, the margin that you built in for profit ends up supporting the overhead costs of your business. By the end of the year you may end up barely making more than the hourly you used to make as someone else’s employee.
Planning for Profit
Pricing Plumbing for Profit is a new program that helps you figure out exactly how much it costs to run your business and includes complete costing templates and pricing workbooks that you can use to grow your plumbing business. Created by Master Plumber Randy Drake and Plumber’s Training Institute, this program will give you the tools and the business skills you need to start making more money as a plumber and business owner.
Start now, your time is worth it.
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