How to Price Your Services Without Losing Jobs or Your Margins

I had a conversation recently with a landscaper at a trade expo who told me he hadn't put his prices up in three years.

Three years!

In that time, fuel had gone up. Materials had gone up. Insurance had gone up. His rent had gone up. And yet his hourly rate was exactly where it was in 2023.

When I asked him why, he said what most trade business owners say: "I don't want to lose

customers."

That fear of losing work is one of the most expensive things a small business owner can carry.

Because what happens in practice is that you keep every customer, stay flat out busy, and still can't work out why there's nothing left in the bank at the end of the month.

You haven't lost customers. You've lost your margin.

The real cost of underpricing

It speaks into something I see constantly with trade and service business owners. They price their workbased on one of three things: what their competitors seem to be charging, what they used to charge at their last job, or what just feels about right.

None of those methods account for what it actually costs you to deliver the work. And none of them leave room for a profit.

Let me put it plainly. If you don't know your true cost of doing business, you are guessing. You will find that when you are guessing, you are almost always guessing low, because the fear of being too expensive is louder than the actual maths itself.

Your cost of doing business includes your wages (including your own), your vehicle costs, yourinsurances, your tools and equipment, your phone and software, your accountant, your admin time, your superannuation, and every other overhead you carry whether you have work on or not.

When you add all of that up and divide it across your billable hours, the number is usually a lot higher than people expect.

That number is your break-even point. Anything you charge above it is profit. Anything below it is a loss, no matter how busy you are. If you are ready to get clarity on your numbers and what you need to charge so that you can actually make some decent profit, then have a look at Plan.Price.Profit.

Why "busy" is not the same as "profitable"

I have worked with business owners who were booked out six weeks in advance and still struggling financially. It sounds like a contradiction, but it is not. They were just very efficiently losing a small amount on every job.

The volume of work masked the problem. They felt successful because the phone kept ringing. But the bank balance told a different story.

If you recognise yourself in that, you are not alone. It is one of the most common patterns I see in trade businesses, particularly in the green industry; Lawn care, garden maintenance, landscaping, arborists etc.

The work is consistent, the clients are loyal, and the margins are paper thin because nobody sat down and did the numbers properly.

A better approach to pricing

The fix is not complicated, but it does require you to stop and think rather than just react.

Start with your numbers. Work out your total overhead costs for the year. Work out how many billable hours you realistically have (not 52 weeks of 40 hours, because you need to account for holidays, sick days, admin time, quoting time, and travel between jobs). Divide your overheads by your billable hours. That is your hourly cost rate.

Then add your profit margin on top. Not a guess. A deliberate decision about what profit you want to make.

Most trade business owners I work with are shocked when they see their real cost rate. It is almostalways higher than their current charge-out rate. Which means they have been working at a loss without realising it.

What about the competition?

The question I always get is: "But my competitors are cheaper."

Maybe they are. Or maybe they are also underpricing and wondering why they can't get ahead. You don't actually know their cost structure, their margins, or whether they are making any money at all. That saying 'it's like the blind leading the blind' comes to mind regularly.

Competing on price is a race to the bottom, and the only prize at the bottom is burnout and a business that owns you rather than the other way around.

The better play is to compete on value. Be reliable. Be professional. Communicate well. Show up when you say you will. Do quality work. These things matter far more to good customers than saving thirty dollars on a quote.

And here is what most people discover when they do put their prices up: the customers who leave are usually the ones you didn't want anyway. The ones who were hard to deal with, slow to pay, and always looking for a discount. The customers who value good work stick around. Often they don't even notice.

Where to start

If you have not reviewed your pricing in the last twelve months, start there. Pull out your books, work out your real costs, and compare them to what you are charging.

If the gap worries you, that is actually a good sign. It means you have found the problem, and now you can fix it.

Pricing is not about being greedy. It is about being sustainable. It is about building a business that pays you properly, supports your family, and doesn't require you to work sixty-hour weeks just to break even.

If you are not sure where to start with this, or you just want someone to work through the numbers with you, reach out. I'd love to have a chat. You can find more about how I can help you build profit at my main website.