Hit 500 residential jobs last week and it made me rethink my whole pricing model

I've been doing kitchens and baths for about 7 years now. Never really tracked my numbers until I had a slow week and went through old invoices. 500 jobs in that time. Some small, some full gut jobs. The thing that hit me is how many of those early ones I underbid by a lot. Maybe 50-60 jobs where I basically worked for free or barely broke even. If I had known then what I know now, I would have doubled my rates from day one. Has anyone else gone back and realized they were losing money for years without knowing it?

2 comments

2 Comments

oliver_mitchell25d ago

Double down on that logistics fee thing. I started adding a flat "mobilization charge" to every bid after I tracked how much time I spent just dealing with the supply house runs, return trips for wrong materials, and driving between job sites. It came out to almost 60 hours a year of pure wasted time that I was eating. I also started factoring in the cost of my mistakes directly into my overhead. Like I keep a running spreadsheet of every screw up I make, from cutting a cabinet door wrong to patching a drywall hole I accidentally made. That number over a year is way bigger than you think. Now I add 5% to every bid just for my own stupidity fund. It covers those days where you do something boneheaded and have to fix it for free.

calebw5025d ago

And that's not even counting the hidden costs that eat up your margin on every single job. The gas to drive there and back, the tolls, the wear on your truck, the time spent loading and unloading materials multiple times because you forgot something. I ran the numbers on just my drive time to supply houses last year and it came to about 40 hours of unpaid labor. Now I add a flat 15% "logistics fee" to every bid and nobody's ever questioned it. Also, did you factor in the cost of fixing your own screw ups? Because I had to rip out a backsplash I installed wrong once and that wiped out the profit from three other jobs combined.