Plenty of shops are booked out two weeks and still wonder where the money went. Usually the leak isn't effort or demand — it's pricing built on numbers that were never quite real: the tech's wage instead of his true cost, markup confused with margin, overhead nobody divided by anything. This is a five-number check you can run on your own pricing in an afternoon.

Number 1: What an hour of labor actually costs you

A tech who earns $30 an hour does not cost you $30 an hour. Add the employer's share of payroll taxes, workers' comp, any benefits, and the truck, fuel, insurance, and tools that make his hour possible — that's his burdened cost, and it's the only honest starting point for pricing labor. Most owners who run this number for the first time find it's a third or more above the wage. Every price built on the raw wage starts underwater.

Number 2: Your overhead per day

Rent, office help, software, insurance, phones — the costs that exist whether or not a job gets done. Add them up for the month and divide by the number of working days. That's what it costs to open the doors each morning. If your pricing never mentions this number, your margins are donating it.

Number 3: Markup is not margin (the expensive confusion)

This one eats more profit than any competitor. If a job costs you $600 and you add a 25% markup, you charge $750 and keep $150. But $150 of a $750 ticket is a 20% margin — not 25%. To actually keep 25% of the final price, you divide: $600 ÷ 0.75 = $800.

Same job, same "25%," fifty dollars apart — multiplied by every job, every week. If your prices were built by marking up costs, your real margins are thinner than the number in your head.

Number 4: What the other guy charges (and why it's a trap)

Competitor prices are information, not instructions. The shop across town may have a paid-off building, a spouse doing the books for free, or — just as likely — pricing that's slowly sinking him too. Price from your costs and your margin target. Use competitor prices only to understand what customers will compare you against.

Number 5: When you last raised them

Material costs, wages, and fuel have all moved in the last few years — on your cost side. If your prices haven't moved since before they did, your margin absorbed the difference. A yearly pricing review, same month every year, against fresh cost numbers, is the habit that keeps a busy shop a profitable one.

Putting the check together

For your next quote, run it on paper: burdened labor + materials + (overhead per day × the job's share of a day), then divide by (1 − your target margin). Compare that number to what you would have charged by habit. The gap between those two numbers — times every job this year — is what this afternoon was worth.

The bottom line

Pricing isn't guessing what the market will bear. It's arithmetic: real labor cost, real overhead, and margin you compute instead of assume. The shops that graduate from busy to profitable almost always start here — with their own five numbers, run honestly.

Pricing is only one side of keeping more of every job. The other side is what it costs you to get paid — card fees, slow invoices, missed calls. The free statement review covers that half: your statement, side-by-side, in plain numbers. [Get My Free Statement Review]

Resources

• Your payroll records — the starting point for a true burdened labor rate

• Our guide: Service Plans Are a Payments Product — recurring revenue is the other margin stabilizer