How to Price Trade Services: 4 Key Factors to Get Right

Pricing your trade services can feel tricky, especially if you're just starting out. It's common to worry about scaring off customers with higher rates or feeling unsure about what to charge. But setting prices too low can quickly put your business in trouble.

Many new trades businesses end up underselling themselves because they don’t fully understand their costs or the value they offer. This guide will help you break through that confusion and price your services confidently and profitably.

Why Pricing Feels So Difficult

New service businesses often struggle with pricing because they aren't confident in clearly stating their value. Without being sure what makes their service better or different, it's tough to justify higher prices, leading to missed income and low profits.

Many tradespeople set prices based on fear, worried they'll lose customers if they charge more. Unfortunately, this "safe" pricing approach can damage your long-term growth. Similarly, pricing without a strategy (often just guessing a number) can leave you undercharging and under-earning.

Understanding Your True Costs

A key step in profitable pricing is accurately understanding all your business costs. Many trades businesses underestimate their expenses, particularly indirect ones like vehicle running costs, insurance, and advertising. When you price without factoring these in, you risk working for too little or even losing money.

Consider an electrician who doesn't factor in travel time or equipment maintenance. Over a year, these overlooked costs could significantly cut into profits. Always calculate materials, labour (including your own time), overheads, and even taxes to know exactly what each job costs.

Pricing Strategically, Not Randomly

Rather than pulling numbers out of thin air, structure your pricing carefully. Choose a clear model; hourly, project-based, retainer, or value-based that fits your market and the kind of service you provide.

If your local market is crowded, you might feel pressure to match or beat competitors. But pricing too low can spark a race to the bottom, harming everyone's margins. Instead, understand your competition clearly, then confidently highlight the unique quality, reliability, or outcomes your service delivers to justify your pricing.

Setting Profitable Margins

Once you know your costs, add a reasonable profit margin. A typical profit margin in trades can range from 15% to 40%. Pricing towards the higher end of this scale gives you room to negotiate and protects your profits.

For example, if a plumbing job costs £250 in total (materials, labour, overheads), adding a 30% profit margin means your final price is £325. This gives you clear, structured pricing that consistently covers your costs and ensures profitability.

Pricing is one of the biggest hurdles new trade businesses face. That’s exactly why we built the free pricing calculator. It takes the guesswork out and shows you, step by step, how to price every job properly.

Communicating Value to Customers

Clients pay for the results they get, not just tasks done. Clearly explaining what outcomes or problems your service solves helps you command higher rates. Itemised, transparent quotes build trust and show customers exactly what they’re getting. Explain how your expertise or quality materials justify the price you're charging.

Real-World Example

Quick Recap

Pricing your services profitably involves:

• Accurately calculating and understanding all costs.

• Choosing a strategic pricing model and setting clear margins.

• Communicating your value clearly and transparently to customers.

Next Steps

Ready to stop guessing and start confidently pricing your services? Our free pricing calculator tool makes it easy to price every job profitably from day one. For more help turning your quotes into confirmed jobs, check out our guide on How to Write a Quote That Wins More Jobs.