Author: stevek

Converting Enquiries into Signed Contracts: How to Win High-Value Jobs Without Discounting

Last week, we looked at lead generation and why getting the right enquiry is far more important than simply getting lots of enquiries.

Before that, we talked about pricing your contracting business properly and understanding what your work actually needs to earn.

So, assuming you have done that work, you have identified the market you want to operate in, you have marketed yourself to that market and somebody now picks up the phone or sends you an email asking for a quotation.

What happens next?

This is where I think many contractors make selling much harder than it really needs to be.

My son asked me a question when he was starting to develop his decorating business.

“But I’m not a salesman.”

My answer was quite simple.

If you have identified the market you want to work in, developed your marketing strategy and put the right marketing tools around the business, you have already done a lot of the hard work.

Now you have an enquiry from somebody who has shown an interest in what you do.

You don’t suddenly need to become a salesman.

You need to have a process.

My son was never a great communicator unless the conversation was about something he liked.

Yet today he goes into meetings thinking less about selling his business and more about understanding what the customer wants and offering them a solution and a high-quality service.

He wins a lot more than he loses.

And despite all my coaching, I don’t think he would say he has ever really learned formal objection-handling or closing techniques.

Which probably proves my point.

First, understand the enquiry

It is very easy to get excited when a good-looking job lands in your inbox.

But before you spend hours putting together a detailed quotation, stop and ask yourself a few questions.

Who actually wants the work done and who is making the decision?

What are they really looking for?

And perhaps most importantly, why have they contacted you?

Is it simply because they want the cheapest price?

Or are they looking for somebody who can solve a particular problem?

Perhaps they have already had a bad experience with another contractor, or maybe they need the work completed within a particular time-frame, or they need specialist knowledge or skills.

Or maybe they simply want somebody they can trust to do the job properly and leave them with as little hassle as possible.

These things matter.

If you don’t understand what is important to the customer, you are really pricing in the dark.

Remember why they contacted you

This is where the work you have already done starts to pay off.

If you have chosen your market properly, your marketing should already be giving the prospective customer some confidence in what you do.

They may have looked at your website.

They may have looked at previous projects.

They may have seen photographs, qualifications, testimonials or examples of similar work.

By the time you actually speak to them, they should already have some idea that you are capable of doing the job.

That doesn’t mean you should assume you have won it.

It means you now have an opportunity to understand exactly what they want and show them that you can deliver it.

This is particularly important with higher-value work.

If you have followed the pricing process we discussed previously, your price isn’t something you have just pulled out of the air.

It is based on your labour, materials, overheads and the margin you need to make the business work.

So don’t be frightened of your own price.

The site visit is more than measuring up

If you are going to visit the customer, don’t treat it simply as an errand to collect enough information to produce a price.

It is part of the selling process, although I wouldn’t necessarily call it selling.

Listen.

Ask questions.

Look at the job properly.

If you see something that could cause a problem later, explain it.

If there is a better way of doing something, explain why.

If the customer has an expectation that isn’t realistic, explain that too.

You are demonstrating that you understand what you are doing.

That builds confidence.

And confidence is important because when people are spending a significant amount of money, they aren’t simply buying materials and hours of labour.

They are buying the confidence that the job will be done properly.

Don’t just send a price

One of the easiest ways to turn a quality job into a price comparison is to send an email saying:

“Price for works as discussed: £12,500 + VAT.”

What does the customer have to compare?

The number.

And once the number is all they have, you have made it very easy for somebody else to come in £500 cheaper.

A good quotation should explain what the customer is actually getting.

What work are you carrying out?

What materials are you using?

What standards are you working to?

What is included?

What isn’t included?

How long do you expect the work to take?

What does your service provide that somebody else may not?

For a significant project, I would also talk the customer through the quotation rather than simply emailing it over and hoping they read it properly.

Again, this isn’t about becoming a salesman.

It is about making sure the customer understands what they are buying.

And then somebody asks, “Can you do anything on the price?”

Of course they do.

We all ask for a discount, don’t we?

It doesn’t necessarily mean they don’t want to give you the job.

It certainly doesn’t mean you should immediately knock ten percent off your price.

If you have priced the job properly, why would you?

This is where I often tell my son and my clients to go back to what they have already discussed with the customer.

If you have explained that you are using high-quality materials and allowing the right number of hours to achieve the finish they want, explain that again.

If they genuinely need the price to come down, ask what they would be prepared to compromise on.

For example, with my son’s decorating business, it might be possible to use a different paint manufacturer.

But that alternative may give a slightly different finish or have different characteristics.

That doesn’t mean the alternative is bad.

It simply means there is a difference between what was originally specified and what they are now asking you to provide.

The customer can then make an informed decision.

And quite often, particularly on a quality project, they don’t actually want to compromise.

They wanted the better finish in the first place.

What they really wanted was to ask the question:

“Can you do anything on the price?”

There is nothing wrong with asking.

There is also nothing wrong with explaining why your price is what it is.

Following up isn’t being pushy

Another area where contractors can lose work is simply by not following up.

They send the quotation and then sit waiting for the phone to ring.

Sometimes it will.

Sometimes it won’t.

People get busy. Projects get delayed. Partners need to discuss things. Businesses have to get approval.

So, when you send a quotation, agree what happens next.

You might simply say:

“I’ll give you a call on Thursday afternoon once you’ve had a chance to look through everything. Is that OK?”

Now you aren’t chasing them.

You are doing exactly what you said you would do.

And when you follow up, you don’t need a clever sales technique.

Ask if they have any questions.

Ask if there is anything they would like explained.

Ask whether anything has changed.

You are continuing the conversation.

Sometimes you won’t get the job — and that’s OK

If you have done everything properly, priced the work correctly and followed the process, you should have given yourself the best possible opportunity to win the work.

But you won’t win every job.

And I don’t think you should want to.

Sometimes another contractor will be a better fit for the customer.

Perhaps they have a particular skill you don’t have.

Perhaps they are better suited to the type of project.

Perhaps the customer simply prefers them.

If they are a good-quality competitor who can genuinely deliver what the customer wants, then that’s business.

What I don’t want to see is a contractor winning a high-value job simply because they discounted themselves into a position where the job is no longer properly profitable.

Because then you haven’t really won.

You’ve bought yourself a job.

And there is a big difference.

So what have the last three weeks actually been about?

You might reasonably ask what these last three Business After 60 conversations have really been about.

After all, is this really a conversation about running a business if you happen to be in your sixties?

I think it is.

Being 60, 65 or 70 doesn’t suddenly mean that the knowledge you have built up over decades becomes irrelevant.

Quite the opposite.

If you have spent many years running businesses, managing people, dealing with customers, making mistakes, getting things wrong and occasionally getting things right, you have learned something along the way.

You may not know everything.

I certainly don’t.

But I know how to run a contracting business.

I know what has worked for me, what hasn’t, and what I believe gives a contracting business the best chance of being successful.

And this isn’t just theory.

I’m currently using this exact sort of framework with an electrical contractor who is preparing to pass his business across to a younger partner.

His partner is already doing much of the compliance and testing work and knows most of the existing customers.

Yet, like my son, he has said the familiar words:

“I’m not a salesman.”

And he isn’t particularly confident about taking over the running of the business.

But does he really need to suddenly become a salesman or a marketing expert?

He already knows the customers.

He already knows the work.

He already understands the technical side of the business.

What he needs is a framework that brings all those things together and gives him a way of approaching the commercial side of the business with confidence.

That’s really what these conversations are about.

The framework won’t be exactly the same for every business.

A contractor is different from a manufacturer producing a product. A five-person electrical contractor is different from a fifty-person engineering business.

But the principles of understanding your market, knowing your numbers, generating the right enquiries, understanding your customer and having a process for turning an opportunity into profitable work are surprisingly transferable.

And that is where I am taking these conversations.

Over time, I’m going to bring the ideas together into practical frameworks — one aimed at contracting businesses and another for small manufacturers producing and selling their own products.

Not a textbook.

Not a complicated consultancy programme.

Just a framework built around the things I have learned over many years of actually running and working with businesses.

The bottom line

You don’t necessarily need to become a great salesman.

You need to become very good at what you do, know who you want to do it for, understand what your customers need, price your work properly and have a process that allows you to demonstrate all of that.

If you do those things, winning the order should become the natural next step.

And if you lose the job to a quality competitor who was simply a better fit, that’s OK too.

You move on to the next enquiry.

Frequently Asked Questions

Do I need to be a good salesman to win more contracting work?

Not necessarily. If you understand your market, know your service and have a clear process for handling enquiries, much of what people call “selling” is simply having a good conversation with a potential customer and understanding what they need.

Should I discount my price if a customer says it is too expensive?

Not automatically. If your price is based on the actual cost of delivering the work and the profit your business needs, first find out what the customer is concerned about. If necessary, look at whether the specification or scope can be changed rather than simply removing money from your margin.

What should I do if I lose a quotation?

Find out why if you can, learn from it and move on. You won’t win every job, and sometimes another contractor will simply be a better fit. The important thing is not to win work at any cost.

How important is follow-up after sending a quotation?

Very. A professional follow-up isn’t about pressuring someone into buying. It is about making sure they have understood your proposal, answering questions and finding out whether anything has changed.

Can the same approach work for manufacturers?

The details will obviously be different, particularly where you are selling a product rather than a contracting service, but many of the underlying principles are similar: identify the right market, understand the customer, communicate your value, price correctly and have a process for converting genuine opportunities into profitable orders.

Continue the conversation

If you run a contracting business, manufacture a product or simply have years of business experience behind you, I’d be interested in your thoughts.

What has worked for you?

What hasn’t?

And have you ever found yourself saying, “I’m not a salesman,” only to discover that you were actually quite good at talking to customers when you stopped thinking of it as selling?

That’s what these Business After 60 conversations are about — sharing practical experience and turning some of those lessons into frameworks that other business owners can actually use.

Read the next Business After 60 conversation, or explore the wider Business After 60 series.

Why Chasing Every Lead Can Cost You Money — And How to Attract Clients Who Value What You Do

🟦 Business After 60 Conversation

Last week, we looked at the fundamentals of getting your pricing right without leaving money on the table.

We discussed understanding your material costs, accounting for your true labour rate, setting your profit margins deliberately, and recovering your overheads.

Included in those business overheads, of course, is a budget for marketing.

Sometimes it can be confusing to differentiate these costs. For example, your website — which is your digital shop window to the world — software packages, and lead generation packages can feel like general admin, but they are very much part of your marketing machine.

I like to break it down into a simple reality:

The next question is how you generate the right leads for your contracting business — because more enquiries aren’t necessarily better enquiries.

You also need a business capable of attracting and delivering the work that makes that pricing possible.

1. Understand Your Market (And Who You Are Actually Serving)

First of all, you have to understand your market and the specific clients within it.

If we take electrical contractors as an example, are you operating within the domestic homeowner market? The volume house building market? Or the commercial market, which covers a whole spectrum of environments like data centres, office blocks, hotels, and hospitals? Or perhaps industrial clients, including factories, pumping stations, and water treatment works?

Very often, our businesses are not a “one-size-fits-all” operation.

Yet, I frequently hear contractor owners say:

“We need to diversify our business because there’s not enough money in the sector we’re operating in.”

What usually happens next? They spend a huge amount of money on shiny new equipment, only to discover their staff aren’t adequately trained or experienced enough to deliver that type of work profitably.

I have seen many examples of this over my years in business advisory and contracting, but one that sticks closest to home involves my son.

2. A Father-and-Son Conversation on Lead Generation

A few years ago, I helped my son start his painting and decorating contracting business. After a couple of years of hard graft, he walked up to me one afternoon looking completely deflated.

“Dad, I’m packing it in,” he said. “I’m not making any money. I’m going back to work for my old boss on a day rate.”

At the time, he was employing two painters. He was signed up to directories like Checkatrade, buying online lead packages, and trying all sorts of digital shortcuts.

“I’m losing money on every job,” he told me.

“Don’t be hasty,” I replied. “Why didn’t you come to me earlier?”

“I wanted to do it on my own without running to you.”

What followed was a long father-and-son conversation — the kind of frank, honest chat that happens often in family businesses. (It’s a subject close to my heart, and probably a book I must get around to writing one day!)

Once we delved properly into the numbers and his process, two big things became immediately apparent:

1. His prices were too low while his overheads were rising.
2. He is a perfectionist. He insisted on using top-end brushes, high-quality rollers, and premium trade paint.

Here was the paradox: initially, his prices had been higher to reflect that quality. But when the phone didn’t ring enough, he panicked. He started buying cheap, generic online leads.

To win work from those price-sensitive lead sources, he lowered his hourly rate and compromised on his materials to match the customer expectations those leads were creating.

He had fallen into a classic trap: He was allowing his lead source to dictate his business model.

3. Don’t Let Cheap Leads Dictate Your Contracting Business

Look at how that cycle unfolded:

• He started with quality materials, high standards, skilled painters, a perfectionist approach, and pricing that reflected all of it.
• The enquiries coming in through his online lead platforms didn’t support that level of service.
• So, he changed his entire business model to chase the enquiries.

He was working harder, carrying more overhead and compromising the standards that had originally differentiated his business.

The answer seemed obvious: find customers who valued the quality of work and the finish he was trying to provide.

But that raised a much bigger question: what sort of business was he actually trying to build — and was the rest of the business equipped to support it?

4. Are You Equipped for the Work You Want to Attract?

“High-end customers” is a phrase thrown around a lot in marketing.

But let’s be clear: it doesn’t mean you can charge more money simply because a client has a larger house or a bigger budget.

It means finding customers who value what you are genuinely good at — and ensuring your business is fully equipped to deliver it.

When my son and I looked closely at his setup, we had to ask hard questions:

• Were his employed painters trained to the standard required for detailed, high-spec properties?
• Did he have the right dustless sanding systems, specialist spraying gear, ladders, and scaffolding required to take on larger, complex projects safely and efficiently?

Marketing isn’t just about getting someone to call you. It is about aligning three things:

I’ve seen businesses spend a fortune trying to enter a new market without first asking a fairly basic question: are we actually equipped to do this work profitably?

A domestic electrical contractor can’t necessarily decide tomorrow that they’re going after major industrial work because the contracts are bigger.

The skills, certification, equipment, project management, health and safety requirements and experience may all be different.

1. Your Core Expertise: What you do exceptionally well.
2. Your Operational Capability: The equipment, training, and systems you have in place.
3. Your Target Client: The people who actively need that specific level of quality and are willing to pay for it.

If any one of those three is out of alignment, your marketing will feel like an uphill battle.

5. Building Your Contractor Marketing Strategy

So how do you start attracting those ideal clients without spending thousands of pounds every month on aggressive agency retainers or cheap lead-gen sites?

Treat Your Website as Your Shop Window

Your website shouldn’t just be an online business card that says “We do electrical work” or “We do painting.” It needs to demonstrate your standards, show off your completed projects, and explain how you work. High-value clients look for professionalism, reliability, and clear evidence of past work.

(If you’re unsure whether your current site is doing its job, take a look at our downloadable guide: How to Identify the Right Website Builder for Your Business Checklist).

Build an Organic Relationship (The Power of an Email List)

One of the most useful long-term assets a contracting business can build is its own audience.

Writing a blog or newsletter, sharing practical advice — such as “What to look for when planning a full house rewire” or “How to prepare commercial premises for annual testing” — you establish trust before you ever submit a quote.

Encouraging prospective clients and local commercial contacts to join a simple email list builds an ongoing pipeline of work that you own outright, rather than renting from a third-party lead broker.

One Size Doesn’t Fit Every Business

There is an important point I don’t want to lose here.

I’m not suggesting that lead-generation platforms, software or automated marketing systems are inherently bad. Far from it.

There are businesses I have worked with where I would recommend particular lead-generation systems or specialist companies because they fit the type of business, the market and the objectives they are trying to achieve. Some of these systems can work extremely well.

In fact, there is a slightly ironic example in my own family.

My niece’s son is starting his own plumbing business. When he asked me what I thought he should do to start generating work, one of the things I told him was to look at platforms such as Checkatrade or TrustATrader.

Why would I recommend something that contributed to the problems my son experienced?

Because the circumstances are different.

A new plumbing business needs to get known, generate enquiries and build a customer base. A lead-generation platform can be a perfectly sensible part of that process.

My son’s problem wasn’t simply that he used a lead-generation platform. His problem was that the type of work it was generating was pulling his business in a direction that didn’t match the business he wanted to build.

That is an important distinction.

The tool isn’t the strategy.

A lead-generation platform, an email system, a website, social media or a referral network are all tools. Whether they are right for you depends on what you are trying to achieve, the market you operate in and whether your business is equipped to deliver the work those enquiries generate.

There really are many ways to skin a cat, as the old saying goes.

The trick is choosing the method that fits your business, rather than changing your business to fit the method.

Next Week: Converting Enquiries into Signed Contracts

Generating the right enquiries is one thing. Turning those enquiries into profitable, signed contracts without getting dragged into a bidding war is another.

Next week, we’ll look at the sales and conversion process for contractors — how to present your quotes, follow up professionally, and win the jobs you actually want.

And Finally…

Marketing your contracting business isn’t about shouting louder or buying more leads. It’s about clarity.

Stop letting cheap lead platforms tell you what your business is worth.

Identify the market sector where your skills actually shine, make sure your team and equipment are equipped to handle it, and build a simple digital shop window that speaks directly to the customers who value quality.

When your marketing matches your capability and the business you actually want to build, you have a much better chance of attracting the right sort of work rather than simply more work.

FAQs

How do I generate leads for a contracting business?

There isn’t one method that works for every contractor. The right approach depends on your market, pricing, capabilities and the type of business you want to build. Options include lead-generation platforms, your own website, referrals, networking, useful website content and an email list.

How do I attract the right customers for my contracting business?

Start by identifying the type of work your business is genuinely equipped to deliver profitably. Your website, case studies, previous work, qualifications and marketing should then make it clear who you work with and the standards you provide.

Are lead-generation websites worth it for contractors?

They can be. Lead-generation platforms can be particularly useful for businesses that need to establish themselves and generate enquiries. The important question is whether the type of work generated fits your pricing, capabilities and business model. That’s the distinction illustrated by the two family examples in this conversation.

Should a contracting business have an email list?

Building your own email list can create a useful long-term marketing asset. Sharing practical information through a website, blog or newsletter can help you stay in contact with potential customers, previous clients and commercial contacts rather than relying entirely on third-party lead sources.

🟦 Business After 60 Conversation

Sometimes you are just good at something and you can’t really explain why. This conversation is relevant at any age if you run or manage a contractor business.

Over the last few years, some of the questions I’ve been asked most often by contractors are:

“How can I price my electrical jobs without leaving money on the table?”

“Why aren’t I getting enough leads?”

“I’m doing loads of quotes, but I’m not winning any work.”

Change electrician to plumber, builder, carpenter, window installer, heating engineer or another trade and the questions are remarkably similar.

Every trade has its own technical requirements, regulations and certification, but when it comes to running a profitable contracting business, there are some fundamentals that don’t change.

And one of the biggest is pricing.

I’ve spent many years advising and running contracting businesses, and one thing has become very clear to me:

You can be the best electrician, plumber or carpenter in your area, but if you consistently get your pricing wrong, you won’t have a successful business.

Price too high and you don’t win the work.

Price too low and you win the work — but lose money doing it.

Neither is a particularly good business model.

So, how do you get it right?

This isn’t intended to be a complicated estimating manual. It is an overview of the areas I believe every contractor should have under control if they want their quoting to consistently produce a profit.

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Why accurate pricing matters

It sounds obvious, but inaccurate estimating can have a surprisingly damaging effect on a contracting business.

A small mistake on one job might not matter.

Make the same mistake on twenty jobs and you have a problem.

And I’ve seen businesses make money on paper while losing money in reality because their pricing system didn’t properly account for labour, overheads, wasted time, materials or variations.

A structured, consistent and transparent pricing system does three important things.

It protects your cash flow

You shouldn’t be relying on the deposit from the next job to cover the materials or costs from the last one.

It protects your margin

Every cost needs to be accounted for — including the ones that are easy to forget.

Fuel, vehicles, administration, supervision, travelling, tools, insurance, software and all the other costs involved in running the business don’t disappear simply because they aren’t visible on the quote.

It builds client confidence

A professional quote that clearly explains what is included, what isn’t included and how changes will be dealt with gives the client confidence.

It gives you something to learn from

Perhaps most importantly, you should be able to compare what you estimated with what actually happened.

If you estimated 20 hours and the job took 30, that’s information.

Ignore it and you will probably make the same mistake again.

Use it and your future pricing becomes better.

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So how do you price a contracting job accurately?

In my experience, pricing is one of the most valuable skills a tradesman can develop.

You don’t need to become an accountant.

But you do need to understand what the job is going to cost you, what your business needs to recover and what profit you need to make.

I would break it down into several key areas.

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1. Understand the job before putting a price on it

This sounds straightforward, but too many pricing problems start before the calculator or spreadsheet is even opened.

Make sure you understand exactly what the client wants and what you are actually being asked to deliver.

Purpose and deliverables

Be specific.

What exactly are you supplying?

What exactly are you installing?

What does the client expect to receive at the end?

The clearer the scope, the less chance there is of misunderstanding later.

Technical documentation

Where appropriate, review drawings, take-offs and client-supplied information carefully.

Look for missing information, clashes or anything that could turn into an additional cost later.

Site conditions

Whenever possible, understand the site rather than relying entirely on paper.

Access, ceiling heights, existing installations, restricted areas, occupied buildings and difficult working conditions can all add time.

And time costs money.

Regulatory and compliance requirements

Identify permits, testing, certification and other compliance requirements before you price the work.

Don’t discover them after you’ve won the job.

Dependencies

Consider other trades, deliveries and scheduling.

You can price eight hours of work perfectly and still lose money if your eight hours become three separate visits because another contractor wasn’t ready.

Assumptions and exclusions

This is one of the areas I think contractors sometimes overlook.

Be clear about what isn’t included.

For example, asbestos removal, plastering, making good, specialist access equipment or work by another trade may sit outside your price.

Don’t leave it for an argument later.

Risks and contingencies

Think about what could reasonably go wrong.

Fragile ceilings.

Restricted access.

Night work.

Difficult working environments.

Existing installations that aren’t as straightforward as they appeared.

You don’t need to add an enormous contingency to every job, but you do need to understand the risks you are taking.

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2. Calculate your material costs properly

Material prices move constantly.

If you are pricing today’s job using a price you remember from six months ago, you may already be losing money.

Build a proper materials list

List everything.

Cables, fittings, fixings and consumables for an electrical contractor.

The equivalent materials for whatever your particular trade requires.

The little things are easily forgotten — and little things multiplied across hundreds of jobs aren’t little anymore.

Use current supplier pricing

Use up-to-date supplier catalogues, price books or online pricing wherever possible.

Don’t rely on memory.

Allow for waste

Cut-offs, breakages, damaged materials and unexpected changes happen.

A sensible allowance can protect you from having to absorb those costs.

Don’t forget delivery

Delivery charges, small-order fees and handling costs can all eat into margin.

Create standard assemblies

For repetitive work, standard assemblies can save a huge amount of time.

For an electrician, that might be a standard price for a double socket installation, lighting point or consumer unit.

Other trades can do exactly the same thing with their own repetitive work.

The benefit isn’t just speed.

It creates consistency.

Remember markup and warranty

If you supply materials, your price needs to reflect more than the cost of buying them.

There is administration involved.

There may be warranty obligations.

There is time involved in sourcing and supplying them.

Make sure your pricing reflects the complete cost of providing them.

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3. Work out what your labour really costs

This is where I believe many contractors get themselves into trouble.

They know what they want to earn per hour.

That isn’t necessarily the same thing as what their labour actually costs the business.

Break the job into stages

For example:

First fix.

Second fix.

Testing.

Handover.

Breaking a job down makes it easier to identify where time might be lost.

Use real information

If you have completed similar jobs before, use that information.

If a particular installation normally takes you six hours, don’t automatically estimate four because you want the quote to look competitive.

Your historical job data is one of the most valuable pricing tools you have.

Consider the working environment

Access, cramped spaces, other trades, occupied buildings and difficult conditions all affect productivity.

Include supervision

If you have apprentices, labourers or junior staff, remember that somebody has to manage and supervise them.

Their time still costs the business money.

Include travel and setup

Travel.

Loading and unloading.

Setting up.

Clearing away.

Testing.

Certification.

These are all part of the job even though they may not be the part the client sees.

Know your charge-out rate

Your charge-out rate needs to recover the actual cost of employing that person and the overheads associated with the business.

Wages are only part of it.

Insurance, vehicles, tools, administration, premises and other operating costs all need to be recovered.

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4. Understand your overheads

Overheads are the hidden costs of running a contracting business.

And if you don’t recover them through your pricing, you are effectively working for free for part of the time.

Think about:

• Insurance
• Vehicles
• Fuel
• Tools and equipment
• Phones
• Software
• Premises
• Accounting
• Administration
• Marketing
• Training
• Management time

The exact list will depend on the business.

The important thing is to know what yours actually are.

Then decide how you are going to recover them.

You might build them into your labour rate.

You might recover some as a percentage of costs.

There isn’t necessarily one magic formula.

Consistency is more important than complexity.

And review your overheads regularly.

Costs change.

Fuel goes up.

Software subscriptions increase.

Insurance changes.

Vehicles need replacing.

If your pricing stays exactly the same while your costs continue rising, your margin is quietly disappearing.

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5. Set your profit margin deliberately

This is probably the biggest difference between pricing a job and building a profitable business.

Don’t simply add something to your costs and hope there is enough left at the end.

Decide what return the business needs.

Different types of work may justify different margins.

Routine service work, complex projects and emergency work don’t necessarily carry the same risk or require the same pricing approach.

And there is an important distinction every contractor should understand:

Markup isn’t margin

If your job costs £1,000 and you add a 25% markup:

£1,000 + £250 = £1,250

Your profit is £250.

But £250 isn’t 25% of the selling price.

Your margin is 20%.

If you want a 20% margin on a job costing £1,000:

£1,000 ÷ 0.80 = £1,250

That’s a simple distinction, but confusing markup and margin can cost a business a lot of money over time.

The formula is:

Price = Cost ÷ (1 – Target Margin)

So if your cost is £1,000 and your target margin is 20%:

£1,000 ÷ 0.80 = £1,250

Know which number you are working with.

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6. Choose the right pricing model

There isn’t one pricing method that works for every job.

The right approach depends on the type of work.

Time and materials

Useful where the scope is uncertain or investigative.

Fault finding is a good example.

You don’t always know what you are going to find before you start.

Flat-rate or per-point pricing

Useful for standardised work.

It can make pricing faster and more consistent while rewarding efficiency.

I’ve seen electricians use this approach successfully for repetitive work where the scope is well understood.

Fixed or lump-sum pricing

Useful when the work is clearly defined, particularly where drawings, specifications and deadlines are available.

The advantage for the client is cost certainty.

The risk for the contractor is that you have to get your preparation right.

Tiered pricing

Good / Better / Best can be an effective way of giving clients a choice.

For example, an electrical contractor might offer different kitchen rewiring packages with different levels of fittings, lighting and technology.

The client gets a choice rather than simply seeing one number.

And you create an opportunity to increase the average value of the job without simply trying to “sell harder”.

Maintenance plans

Don’t overlook recurring revenue.

Testing, inspection, emergency lighting or equipment maintenance agreements can create more predictable income and stronger long-term customer relationships.

For many contracting businesses, building some recurring revenue into the business can make a significant difference to cash flow and stability.

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7. Use technology where it genuinely helps

You don’t need complicated software simply because everyone else appears to be using it.

But the right estimating system can make a big difference.

Modern estimating software can help contractors:

• Complete digital take-offs from plans
• Build bills of materials
• Create reusable assemblies
• Maintain current material pricing
• Apply consistent markups and margins
• Produce professional quotes
• Offer Good / Better / Best options
• Compare estimated and actual hours
• Capture time
• Manage variations and change orders
• Convert accepted quotes into jobs
• Raise purchase orders
• Track work in progress
• Keep testing certificates and job records together

The important word is system.

Technology doesn’t fix poor pricing.

It makes a good pricing process faster and more consistent.

I’ve also been looking at the estimating software regularly used by UK contractors and developing an independent Ropho checklist to help contractors compare the options against the size and type of their business.

A sole trader doesn’t necessarily need the same system as a larger limited company.

The best software is the software that solves your problems without creating another one.

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8. Benchmark yourself — but don’t become obsessed with your competitor

A few years ago I gave a presentation on benchmarking at a trade conference.

It produced a lively conversation.

I suggested that trade businesses should regularly review their pricing against the market and their own performance.

The response from some people was predictable:

“I/we don’t have time for this extra work.”

I understand that.

When you’re busy running jobs, quoting, dealing with customers and managing staff, another spreadsheet doesn’t sound particularly attractive.

But there is a problem.

If you don’t know where you stand, you are pricing blind.

Rates vary enormously by region, type of work, customer, complexity and level of expertise.

A contractor in one part of the UK shouldn’t automatically copy the rate of a contractor in another.

Benchmarking should be a sense check, not a race to the bottom.

Look at:

• Local market rates
• Your actual costs
• Your productivity
• Your win rate
• Your margins
• The type of customers you want
• The type of work you want more of

Then decide where you should sit.

And review it regularly.

Don’t confuse being busy with being profitable

This is something I’ve seen repeatedly over the years.

A contractor tells me:

“We’re absolutely flat out.”

My next question is usually:

“That’s good. Are you making money?”

Being busy can be very reassuring.

The phone is ringing.

The diary is full.

There are vans everywhere.

But if your pricing is wrong, you can be incredibly busy and still have very little to show for it.

In some cases, being busy with the wrong work can actually make the situation worse.

You are tying up your people, vehicles and cash while generating insufficient return.

That’s why I believe pricing deserves much more attention than simply asking:

“Will the customer accept this price?”

The better question is:

“Does this price make sense for my business?”

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Pricing creates trust — and trust creates profit

At the end of the day, a customer isn’t simply buying a cable, a socket, a window, a boiler or a few hours of labour.

They are buying expertise.

They are buying reliability.

They are buying compliance.

They are buying someone to turn up when they said they would and do the job properly.

They’re buying peace of mind.

That doesn’t mean you can charge whatever you like.

It means you shouldn’t automatically assume that being the cheapest is the best way to win work.

A professional pricing process helps communicate value.

Explain what the customer is paying for

Make the value clear.

Give customers choices

Where appropriate, offer different levels of specification or service.

Be transparent

Explain what is included, what isn’t and how unexpected work will be handled.

Keep your promises

Deliver what you quoted.

Communicate early if circumstances change.

Document variations.

Learn from every job

This is perhaps the most important one.

When the job is finished, compare:

What did I estimate?

with

What actually happened?

How many hours?

How much material?

What went wrong?

What went better than expected?

What would I price differently next time?

That information is gold.

Next week: Getting the work through the door

Getting your pricing right is one part of running a profitable contracting business.

The next question is a pretty obvious one:

How do you get enough of the right people to ask you for a quote in the first place — and then actually convert those enquiries into profitable work?

That’s what we’ll look at in next week’s Business After 60 Conversation.

I’ll be talking about getting leads and converting them for your contracting business without spending hundreds or thousands of pounds every month on aggressive email systems and complicated marketing campaigns.

Because generating enquiries is one thing.

Turning the right enquiries into customers is another.

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And finally…

I’ve always believed that one of the biggest mistakes a contractor can make is assuming that being good at the trade automatically means being good at running the business.

It doesn’t.

You can be an outstanding electrician and a poor businessman.

You can be an exceptional plumber and consistently under-price your work.

You can be brilliant at building, carpentry or installation and still spend your evenings wondering where all the money has gone.

The trade gets the work through the door.

The business systems determine whether that work actually makes you money.

Pricing is one of those systems.

Get the scope right.

Know your material costs.

Understand your real labour cost.

Recover your overheads.

Set your margin deliberately.

Choose the right pricing model.

Benchmark yourself.

Use technology where it genuinely helps.

And, perhaps most importantly, learn from your actual results.

Because the objective isn’t simply to win more work.

It’s to win the right work at the right price — and still have a profitable business when you’ve finished it.

That’s the difference between being busy and building a business.

FAQs

How do I price a contracting job accurately?

Start by understanding the complete scope of the work, then calculate your material costs, labour, overheads and required profit margin. You should also consider access, site conditions, compliance, travel, waste and potential risks. Finally, compare your estimate with the actual cost after the job is complete so you can improve future pricing.

What is the difference between markup and profit margin?

Markup is the percentage you add to your cost. Margin is the percentage of the final selling price that represents profit. For example, adding 25% markup to a £1,000 cost produces a £1,250 selling price, but the resulting profit margin is 20%.

Should contractors use estimating software?

Estimating software can make pricing faster and more consistent, particularly for businesses carrying out repetitive work. It can help with take-offs, material costs, labour, assemblies, margins, quotations and comparing estimated costs with actual results. However, software won’t fix a poor pricing system — it simply makes a good process easier to manage.