How to Price Your Services Without Undercharging

Undercharging is the number-one reason service businesses struggle. The fix isn't guessing or copying a competitor — it's a simple formula you can apply to every job.

The formula

Price = (Materials + Labor + Overhead) × Markup. Add up what the job actually costs you, then apply a markup that leaves a healthy profit. A 40–60% margin is healthy for most service businesses.

Don't forget these costs

• Your time at a real hourly rate — including drive time
• Materials and consumables
• Overhead: insurance, fuel, software, marketing, wear and tear
• Payment processing and platform fees

Package, don't itemize everything

Offer good / better / best packages instead of one price. Most customers pick the middle option, and packages quietly raise your average sale.

Raise your prices in small steps, communicate the value, and watch your margins — the goal is a business that pays you well, not one that keeps you busy and broke.