Pricing6 min read
Pricing for profit, not just to win jobs
Winning every quote is a warning sign, not a success metric. If your hit rate is very high, you're probably underpriced, and it's costing you.
- Updated
- 18 Oct 2026
In short
If you read nothing else.
- 01
Winning almost every quote usually means you are the cheapest option in the room.
- 02
Labour is undercosted, overheads are not allocated and risk is not priced.
- 03
A proper costing model builds the price from fully loaded cost and a target margin.
In this guide3 sections +
If you're winning 9 out of 10 quotes you submit, stop celebrating. A hit rate that high usually means one thing: you're the cheapest option in the room. And being the cheapest is not a strategy. It's a slow exit from the industry.
The right hit rate
There is no single correct figure, but many contractors who price properly win somewhere between a third and a half of the quotes they send, more if they quote selectively. Track yours. If you're winning nearly everything, you're probably leaving money on every job.
How incorrect pricing happens
Most contractors build quotes by estimating materials, adding labour at a flat rate, and adding a gut-feel margin. The problems:
- Labour is undercosted. The rate used often doesn't account for non-billable time: quoting, site visits, procurement, rework and administration.
- Overheads aren't allocated. Vehicles, tools, insurance, software and your own salary need to be distributed across jobs, not absorbed as a separate category.
- Risk isn't priced. Every job carries scope risk, delay risk and rework risk. A flat margin doesn't account for jobs that go wrong.
Building a pricing model that works
A proper costing model accounts for:
- Direct materials, with a waste factor
- Direct labour at a fully loaded rate
- Subcontractor costs
- Overhead allocation per job
- A target margin that reflects your business goals
General information, not advice. This guide explains the general position for South African businesses. It is not tax, legal or accounting advice. For your specific situation, speak to your accountant, registered tax practitioner or attorney.