Build the true cost base first
Before adding profit, account for material, labor, overhead, consumables, delivery, installation, subcontractors, and a realistic waste allowance. Pricing math cannot fix a missing cost.
Apply one pricing rule consistently
Markup is added to cost; margin is profit measured as a percentage of the selling price. Choose the language and calculation your shop uses, then keep it consistent across all estimates.
Review the job after completion
Compare the estimated cost and hours with actual results. That feedback is what makes a pricing system smarter instead of merely more complicated.
Shop 101
Turn this guide into a tested shop decision.
You leave with one documented input, one controlled result, and one clearer next action.
- Name the material, dimension, or cost input that affects the decision.
- Use the guide and calculator to make the assumption visible.
- Test or compare the result before committing final material, time, or client scope.
Related tools & lessons
Common questions
Is markup the same as profit margin?
No. Markup is based on cost, while margin is based on selling price. The percentages are not interchangeable.
Should labor have markup?
Your complete cost base should recover the cost of operating the business and produce the target profit. Treat labor, overhead, and material deliberately rather than hiding some costs in another line.
Why does my quote look profitable but the job is not?
Common reasons include omitted labor, delivery, installation, waste, overhead, payment fees, or revisions. Track actuals and update the estimating assumptions.