The most common quoting mistake: underpricing
Most freelancers and tradespeople consistently underprice their work. Here is how to price correctly.
Step 1: Calculate your material costs
List every material you will need. Add 10-15% for wastage and price fluctuations.
Step 2: Calculate your labour costs
Estimate the hours the job will take. Multiply by your hourly rate which should cover salary, overheads, and profit margin.
Step 3: Add contingency
Add 10-20% contingency for unexpected complications.
Step 4: Add tax
If VAT or GST registered, add the applicable tax to your quote total.
Step 5: Check your profit margin
Aim for at least 20-30% gross margin. If lower, your pricing is too low or costs too high.