A busy job is not always a profitable job.

A quote can look healthy until you count your own time, the return trip and the costs of keeping the business running. Work out those costs before deciding what to charge.

1. Count the whole job.

Start with materials, delivery, employee and apprentice labour, your own time, vehicle costs and any job-specific expenses. Include preparation, pickup, travel and cleanup in the hours you expect to spend.

Add a reasonable share of overhead: insurance, software, equipment maintenance, admin and other fixed business expenses. Leaving these out makes the estimated profit look better than it is.

2. Pay yourself before calling it profit.

Your time has a cost. If you work 32 hours at an hourly cost of $65, the job carries $2,080 of owner labour cost. Profit is the surplus after that cost, rather than the money left before paying yourself.

3. Keep GST consistent.

If your quoted price includes 10% GST on a fully taxable sale, divide it by 1.1 to work out revenue excluding GST. Use costs excluding GST you can claim back; include GST where it cannot be recovered. Mixed supplies require separate treatment. See the MoneySmart GST calculator.

4. Margin and markup are different.

For a $1,000 job cost, adding a 30% markup produces a $1,300 quote and $300 profit. That is a 23.1% margin because the profit is divided by the $1,300 revenue.

5. Test a longer day.

Ask what happens if the job needs another 12 hours of your time. At $65 per hour, that adds $780 to the cost. A sensible quote should leave enough room for the uncertainty you expect on that job.

Make the decision with your own numbers.

A margin goal is a business choice. The right goal depends on your costs, risk, capacity and market. The calculator’s default is an example, not an industry recommendation. The result is an estimate before income tax.