How to set your prices
Almost every small business charges less than it should, and not because they ran the numbers: because they're afraid of losing the job. Your price comes from what it costs to have you working for an hour, not from what the guy down the street charges, and when the number comes out it's almost always higher than what you were charging. Raising prices loses the customers who cause the most trouble and almost never the good ones.
Updated 2026-08-16
The math almost nobody does
Most people calculate like this: "he charges $50, I'll charge $45." That isn't a price, it's a reaction.
Your own number comes from four things:
**1. What you want to earn a year.** Put it down: $60,000, say.
**2. Your business costs for the year.** Truck, gas, tools, insurance, license, phone, materials you don't bill separately. Call it $18,000.
**3. The hours you can actually bill.** This is the big error. A year has about 2,000 working hours, but you don't bill all of them: quoting, driving, buying materials, invoicing and answering the phone aren't billable. If you bill half, that's 1,000 hours.
**4. Divide.** ($60,000 + $18,000) ÷ 1,000 = **$78 an hour**.
That's your floor. If you were charging $45 an hour, you've been working half of every day for free.
Unbilled hours are the most expensive mistake
If a job takes two hours but you drive forty minutes, spend half an hour buying materials and half an hour quoting it, that job is 3 hours 40 minutes of your day and you charged for two.
That's why per-job prices have to include travel and prep, and why charging for the visit makes sense: it isn't greed, it's that the visit is time out of your life.
Why a low price scares people
This surprises a lot of people. A price far below market doesn't read as a bargain, it reads as suspicious: the customer assumes there's something they don't know.
And it attracts the worst customer: the one who buys purely on price haggles more, complains more, pays late and doesn't come back. The one who pays well asks for less and returns.
When to raise
Three signals, and one is enough:
- **You're full and turning work away.** If you can't fit more in, the price is low.
- **They say yes too fast.** If nobody ever hesitates, you're giving it away.
- **You work a lot and nothing's left at month end.** There the problem isn't customer count, it's price.
How to raise without losing the good ones
**Raise for new customers first.** Anyone from tomorrow pays the new price. Existing ones stay a few months.
**Then tell the existing ones, with notice.** "From October 1st maintenance goes to $X." One month's notice and no apologizing.
**Raise a little, often.** Ten percent a year isn't noticed. Forty percent at once after five years is, and that's when people leave.
**Raise where it hurts least first.** In the busiest hours, on the services you're best at, on emergencies.
Do the actual math: if you raise 15% and lose 10% of customers, you earn more working less.
What to say when they haggle
**Don't lower the price: lower the scope.** "At that number I can do it without X." Lowering the price for the same work tells the customer the first number was padded, and from then on everything you say is negotiable.
**Explain what's included.** Most of the time the person haggling is comparing against a quote that doesn't cover the same things.
**And sometimes, let them go.** A customer who fights you over $50 before you start will fight you over everything. Losing them is gaining time.
Put the price on your site
The fear is scaring people off. What actually happens is that with no reference the customer assumes it's expensive and moves to the next site, or your week fills with inquiries from people who can't afford you.
"Most jobs run $X to $Y" filters and builds trust at once. It's one of the things that most changes how many of your visitors actually write.
doubts
What people usually ask
What if nobody in my area charges that?
Check it properly, because people usually compare against the cheapest advertised price rather than what's actually being charged. And if your real number doesn't fit your market, the problem isn't the price: it's that costs have to come down or the customer type has to change.
Should I charge for giving a quote?
In trades where the visit takes real time, yes, credited if they hire. It filters out people collecting numbers with no intention of hiring anyone.
Hourly or per job?
Per job, almost always. Hourly punishes you for working fast and makes the customer watch the clock. Calculate hourly in your head and quote a flat number.
Should I discount for cash?
You can, but keep it small and deliberate: card processing costs about 3%, so discounting 10% is paying for the privilege of getting paid.
How do I know if I'm too expensive?
If you're told no on price roughly half the time, you're in the right place. If it's yes every time, you're cheap. If it's no almost every time, then it's worth reviewing.