The pricing battle every tradie fights (and how to finally win) – part I

For many builders, the hardest part of the job isn’t being on the tools – it’s being on the computer. Pricing is a vital part of running a business, but it’s often something many business owners struggle with. In the first article of this two-part series, the Next Level Tradie shares how you can finally win your pricing battle

You’re sitting at the computer, staring at the numbers for what feels like the hundredth time today.

The client’s been waiting for your quote. You know what the job will take in materials, hours, plus maybe a few surprises along the way. You do the numbers, and it’s ready to send, or is it?

Then that familiar knot forms in your gut.

“That seems too much. They’ll never go for it.”

So, you shave a bit off. Then a bit more. You tell yourself it’s still okay, that you’ll make it work. You don’t want to be seen as too dear.

But deep down you know you’re undercutting yourself again, but you do it anyway because it feels uncomfortable not to.

The hypothetical builder in this scenario isn’t busy, stressed and barely breaking even because they’re bad at their trade or their business. It’s just that their pricing is working against them.

Maybe you’re the opposite type. You price high because you’re scared of being caught out, like that job last year that took way too long and you ended up working three months for bugger all. Wreaking cash flow, putting stress levels through the roof.

So, you throw out a big number but then miss out on the job even though you really could have used the work.

Either way, you’re not really in control. Your pricing is.

And that’s the real challenge. Because pricing isn’t just about winning work, it’s about building a business that pays you what you’re worth, covers your costs, and gives you a healthy profit at the end of the month.

The good news is the biggest pricing mistakes tradies make aren’t complicated. And once you know what they are, they’re fixable.

Why most tradies are losing money (and don’t even know it)

After coaching thousands of tradie business owners for over 14 years to be more profitable and get more work, I have identified seven pricing mistakes – and how to fix them.

Mistake #1: Pricing against your competitors (the race to the bottom)

Here’s how it usually goes: you hear what your competitors are charging (or think you know), and you price a bit lower to win the job.

It works. You get the work.

But then barely cover your overheads, let alone pay you properly, and still make a profit. You’re busy, sure, but you’re not making money.

Here’s what works better:

1. Instead of pricing off someone else’s number, work to a target margin. You don’t know their costs, their overheads, or whether they’re even making money themselves.

Kevin, a contractor I am working with now, quotes every job using a target margin. He is getting 10% more gross profit on every job, has confidence in his pricing and is getting just as many jobs as when he was pricing lower. Better profit, better cashflow and business is way more fun.

Mistake #2: Guesstimating labour hours (and getting burned every time)

This is where job costs blow out most often.

You estimate the hours, but it’s easy to forget about all the little things that eat time: travel, loading up, site access, setup and pack down, waiting on other trades, client changes, weather delays, callbacks, or the learning curve on slightly unusual jobs.

It all adds up. And suddenly, a job you thought would be profitable is costing you money.

Here’s what works better:

1. Allow for all those hidden time sucks, then add another 5-10% buffer. Even when you do everything right, around 10% of jobs will still go over.
2. If you’ve got a large job and aren’t confident in your numbers, consider hiring a quantity surveyor to price it. It’s better to invest a little upfront than to be stuck with a big job that’s bleeding money.

Mistake #3: Weak scope and exclusions (the silent profit killer)

When your quote is vague, or worse, you don’t have one. The client fills in the gaps with their own assumptions. That’s where scope creep starts.

“Oh, I thought that was included…”

Now you’re in a tough spot. Either you do the extra work for free to avoid conflict, or you try to charge, and it gets awkward because nothing was clearly defined upfront.

The job blows out, your timeline gets squeezed, and your profit quietly disappears.

Here’s what works better:

1. Tighten up your quote so it’s crystal clear what’s included and what’s not.
2. Write your scope like a checklist: exactly what you’re doing, where, and to what finish or standard. Then add a short “Exclusions” section that protects you from common grey areas, such as site access issues, remedial work, site conditions and waste disposal.
3. If something is unknown, let clients know that if you discover something out of the ordinary, it will be extra.This is particularly important with renovations, as you never know what you might uncover.

The goal isn’t to be difficult; it’s to remove confusion, reduce disputes, and make variations easy to price when the client asks for extras. Frame it that way and no good client should have an issue.

Mistake #4: No system for handling variations (or not using it)

Do you have a variations clause in your contract’s terms and conditions and if so, are you using it?

So, the job slowly grows. “Can you just…”, “While you’re here…”, “We changed our mind…”

Suddenly, you’ve done extra materials, extra hours, extra running around for free.

One or two large freebies can wipe out the profit on the whole job. And often the client doesn’t even realise it was extra, they just assume it was included.

Here’s what works better:

1. Make variations a process, not an awkward conversation later.
2. Set the expectation upfront. Tell clients that any changes outside the quoted scope will be treated as a variation and priced before we proceed.
3. Then use a simple system: spot it, price it, approve it, then do it. Record in writing. Text or email works fine.
4. Make sure your team knows that no variations go ahead until they’ve been agreed to in writing.

Rudy, my builder client, had a team that often completed variations, which ran into tens of thousands of dollars in extra costs he felt he couldn’t charge for because he didn’t get his client’s agreement to those extra costs first. Awkward and expensive. Once we got his pricing right and put a system in place for variations, this added $73,000 to his bottom line.

Most clients will respect your professionalism, your margins stay protected, and you stop resenting jobs that “should’ve been profitable”.

Want to read last three mistakes and how to fix them? Read next week’s part II!

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Ready to get your pricing right?

I work one-on-one with tradies and construction business owners to build pricing systems that actually work and give them the profits they want. We’ll go through your numbers, your margins, and your pricing structure together so you can quote with confidence, win the right jobs, and get paid what you’re worth.

Book a free pricing Strategy Session with me at nextleveltradie.co.nz/nextstep