Price work so the job is worth doing.

Markup and margin answer different questions

Markup tells you how much has been added to cost. Gross margin tells you how much of the selling price remains after the direct cost. A 50% markup is not a 50% margin: adding 50 to a cost of 100 creates a price of 150 and a gross margin of 33.3%.

For a target margin, divide the delivery cost by one minus the target margin as a decimal. A cost of 100 with a 40% target margin produces a price of 166.67 before any applicable VAT.

A quote needs more than a percentage

The calculation only works when the cost is honest. Include labour used to deliver the work, materials, subcontractors and a sensible allocation for job-specific overhead. Then decide whether the remaining contribution is enough for fixed overhead, uncertainty and profit.

Scope is part of price. If the customer can reasonably expect revisions, travel, meetings or support that are absent from the quote, the apparent margin can disappear during delivery.

• Separate direct delivery cost from general overhead.
• Write the scope and exclusions before approving the price.
• Model a discount before offering it; do not apply one to the headline price alone.
• Review estimated cost against actual cost after the job.

Use break-even as a boundary, not a target

Break-even shows the volume needed for total contribution to cover fixed costs. It is a useful warning line, but a business priced only to break even has no room for delay, rework, investment or return to the owner.