A customer asks your day rate. You give them a figure, they go quiet, and suddenly you’re wondering whether you’ve priced yourself out of the job. It’s familiar territory for anyone working for themselves. But the number that matters isn’t what sounds reasonable on the phone. It’s what leaves you with a sustainable business after the van, tools, tax and unpaid hours have had their share.
Start with the days you can actually charge for
There are roughly five working days in a week, but they’re not all billable. You’ll spend time quoting, ordering materials, collecting parts, chasing invoices, keeping records and dealing with jobs that run over. Add holidays, illness and the odd day lost to the weather, and your earning days shrink surprisingly quickly.
Look back over the last three months. How many full days did you actually invoice? That’s a much better starting point than assuming you’ll earn your day rate every weekday of the year.
Know what it costs to open the van door
Fuel, insurance, servicing and finance are obvious. Then there’s public liability cover, tool replacement, workwear, parking, waste disposal, software, phone bills, training and accountancy. If you use your home as an office or store materials, there may be additional costs too. Some trades carry expensive specialist equipment; others lose a fair amount of time travelling between small jobs.
Work out your annual overheads, decide what you need to take home and allow for tax and the costs of running the business. Divide that requirement by a realistic number of chargeable days. It won’t give you a universal market rate, but it will show the minimum your business needs to bring in.
A day rate isn’t always the right answer
A straightforward day’s work and a job that needs three visits, specialist materials and awkward access are different propositions. Fixed-price quotes can give customers certainty, provided you’ve allowed for preparation, travel, materials, disposal and a sensible margin for the unexpected.
Be clear about what’s included. If lifting a floor reveals rotten joists or an old installation turns out to be unsafe, agree any extra work before you carry on. A clear written quote protects the relationship as much as it protects your income.
Don’t let the cheapest quote set your business model
You’ll always meet someone willing to do it for less. They may have lower overheads, a different workload or simply be undercharging. Competing only on price leaves little room for a callback, a replacement tool or a quiet fortnight in January.
Customers also value arriving when you say you will, keeping the place tidy, explaining the work and answering the phone afterwards. Those things take time. They belong in the price, not in a growing pile of unpaid favours.
Review your prices before you need to
Check your figures quarterly, particularly when insurance, fuel or materials rise. Track which types of job earn a reasonable return and which leave you working evenings for very little. If you’re permanently booked up but struggling to pay yourself, that’s a sign to examine your pricing rather than simply take on more work.
Working for yourself should give you some control over your life. A rate that only works when every day goes perfectly isn’t doing that.
If this sounds familiar, share it with another tradesperson who’s finding their feet. Trade Mind is here for the people behind the businesses.
