For a local service business, a job can bring in revenue without producing the margin the owner expected. That usually happens when the quote misses labor, travel, overhead, or the distinction between markup and margin. The easiest way to check before quoting is to calculate the job cost and set a margin target explicitly.
Use the free Service Job Margin Calculator to enter your own numbers. The tool supports pressure washing, cleaning, window cleaning, landscaping, HVAC and other service work. It doesn't require an account or collect your inputs.
Start with the full job cost
Estimate all crew-hours, including setup and cleanup. Multiply hours by your actual cost per hour; remember that the owner's labor has a cost. Add supplies, fuel or travel, equipment usage and an appropriate allocation of overhead. Don't double-count the same cost in two categories.
| Fictional service job | Estimated cost |
|---|---|
| Six labor-hours at $35 | $210 |
| Chemicals, materials and supplies | $45 |
| Travel and fuel | $25 |
| Allocated overhead | $58 |
| Total estimated job cost | $338 |
Calculate a target quote for 35% margin
Profit margin is profit divided by the selling price—not divided by cost. The target quote formula is estimated job cost ÷ (1 − desired margin as a decimal). With $338 in costs and a 35% target margin, the planned quote is $338 ÷ 0.65, or $520 before taxes. That would leave an estimated $182 of profit before taxes and any costs omitted from the estimate.
What if you use 35% markup instead?
Markup is based on the cost rather than on the selling price. Adding a 35% markup to $338 gives a $456.30 quote. The projected gross profit is $118.30, which is only about 25.9% of the selling price. Markup and margin are both legitimate measures, but they answer different questions. If you plan using margin, make sure the formula matches.
Where service-business quotes go wrong
- Counting only time at the job and omitting travel or equipment setup.
- Using the billed hourly rate as if it were the actual wage cost.
- Forgetting payment processing, consumables, administrative effort and allocated overhead.
- Relying on a generic per-square-foot rate despite different surfaces, conditions and access.
- Using target profit as though it were guaranteed after the job.
How to turn the number into customer paperwork
The customer generally needs scope, line items or a clear total, exclusions, terms and a way to accept the estimate. Internal wage cost and target margin normally belong in the owner's worksheet. See the owner-view versus customer-estimate worked example for a sample.
Next, run your own job through the free margin calculator and compare SGL's current business tools if you want to explore additional workflows. The figures here are illustrative, and SGL does not guarantee local market pricing, profitability or a particular business result.