General pricing advice for contractors — how to price for profit, not just to win.
Pricing is the thing contractors struggle with most. Too low and you work hard for nothing. Too high and you lose jobs. Here's a framework that works.
You cannot price correctly until you know your real costs. Factor in:
Many contractors underprice because they only think about materials and their hourly rate, forgetting overhead and taxes. Add at least 30-40% to your true cost as a starting point for overhead and profit.
Clients don't always choose the lowest price — they choose who they trust most. The right price paired with a professional, clear proposal beats a lower price from a less polished competitor. Don't race to the bottom.
If you offer a single price, it's judged in isolation. If you offer Good/Better/Best, the highest tier makes your preferred middle option look reasonable. This is why the tiered pricing model consistently increases average deal value.
Tip: If you're winning more than 70% of your proposals, you're probably priced too low. Raise your prices by 10% on your next 10 proposals and see what happens to your win rate.
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