Why Accurate Job Costing Matters for Every Quote

Many trades businesses fall into the trap of quoting based on what competitors charge rather than what it actually costs to complete the work. When you don't account for every hidden cost, like fuel, wear and tear on your tools, and admin time, your profit margins disappear quickly. You might land the job, but if you aren't making a healthy profit, you are essentially working for free.

To fix this, start by breaking down every job into labor, materials, and overheads. Your labor cost shouldn't just be what you pay your apprentice; it needs to cover payroll tax, superannuation, and workers' compensation insurance. If you ignore these costs, they will inevitably eat into your bottom line at the end of the quarter.

Material costs often creep up due to wasted time picking up supplies or price increases from suppliers that aren't passed on. You should track your material spending against every single job to see if your margins are holding up. If you find that you are constantly under-quoting, it is a sign that your material cost estimates are outdated or insufficient.

Finally, factor in your overheads, such as insurance, software subscriptions, and vehicle maintenance. These costs exist even when you don't have a job on the books, so they must be spread across every quote you send out. By adding a small percentage for overheads to every job, you ensure that your business remains sustainable and profitable in the long run.