Pricing a job

How to price a renovation job

The same arithmetic whether the house is yours or the client's. One commits your savings and the other commits your reputation, but the quantities do not care which.

The formula

If you are pricing your own house, drop the last term and keep the other three. That is the only difference between a budget and a quote, and it is worth being clear about, because the mistakes in both are identical.

Materials: a third of the money, and all of the precision

Materials are roughly 30–40% of a renovation. That is the smaller half, and it is also the only half you can get exactly right, because it is arithmetic rather than judgement. Getting it exactly right is worth doing precisely because everything else on the page is an estimate.

• ·Quantities before prices. Count what the job needs — boards, tins, packs, lengths — then price those. Pricing per square metre hides the fact that materials are sold in units the room was not measured in.
• ·Waste belongs to the pattern, not the material. A straight-laid tile floor takes about 10% extra; herringbone about 15%; a 45-degree diagonal about 17%, because every edge tile is a cut. One blanket percentage under-orders two of those three.
• ·If you are quoting, mark materials up 15–25%. Not profit on the goods — it pays for specifying, ordering, collecting, chasing and returning them, and for the price moving between quote and purchase.

Labour: the other two thirds

Labour is typically 60–70% of the total. It varies by job — around 67% on a kitchen, 69% on a bathroom, higher again on an extension — but the shape is always the same: the work costs more than the stuff.

Estimate it in hours per task, not days per room. Days per room is where the optimism gets in. Hours per task forces you to name the task, and naming the task is what surfaces the second fix, the making good, and the day lost waiting for a delivery.

Overheads: the lines that belong to no room

Skip hire, scaffolding, building control, delivery charges, parking, welfare, tool hire, insurance. They belong to the job rather than to any one room, which is exactly why they get missed — a budget organised by room has nowhere to put them. Give them their own block and total it separately.

Contingency is not margin

Contingency — 10% on cosmetic work, 15–20% once walls come open — is for what the job turns out to need. Margin is what the business earns for doing it. Mix them and you will finish a job on budget and still have made nothing, because the rot behind the bath was quietly paid for out of your wages.

The four places it goes wrong

1. 1Quantities taken from floor area instead of a real take-off, so everything downstream inherits a rounding error.
2. 2Waste applied as one number across materials that waste at different rates.
3. 3Overheads left out because they belong to no room.
4. 4Labour estimated once in week one and never revisited while the scope moved.

Doing it here

Draw the rooms once and the measurements price the materials — the right quantity, with the waste factor for the pattern actually chosen, in the units the merchant sells. Add hours per task and the overheads that belong to the job, and the whole thing totals in one place that you can hold against what the work really cost.

Common questions