How to Price Contractor Jobs Profitably

By the Editorial Team at Kore Komfort Solutions  |  Independent Educational Publisher  |  Contractor Business Operations Series

Why Most Contractors Underprice and What It Costs Them

Underpricing is the dominant profitability problem in the trades. It is more common than overpricing, more damaging than slow collections, and harder to diagnose than either because a busy, underpriced contractor looks successful right up until the moment they aren’t. The truck is running. The phone is ringing. The schedule is full. What isn’t visible is that the margin on every job is too thin to cover what the business actually costs to run.

The psychology that drives underpricing is understandable. Contractors price competitively because they are afraid of losing jobs. They price by feel because the alternative (actually calculating their cost structure) requires sitting down with numbers that most people got into the trades to avoid. They anchor on what they charged three years ago because that’s what they know. And they match whatever the competitor down the road is charging without knowing whether that competitor is profitable or not.

The cost of underpricing compounds over time. A contractor with a 10 percent gross margin who should be at 35 percent is not just earning less on each job. They are unable to invest in better equipment. They cannot afford to hire and pay well, so they attract marginal labor. They have no cash reserve to bridge slow periods. They cannot build the operational infrastructure (software, systems, processes) that would allow them to scale. They work harder every year for the same or less effective take-home pay. This is the treadmill that keeps good tradespeople from building businesses that work without them.

The correction is not complicated but it requires being honest about numbers. It starts with understanding what it actually costs to deliver an hour of billable work, and building every price from that foundation up. (If your operation currently has all the symptoms of a business that is surviving rather than growing, the structural analysis in why your contracting business feels chaotic is the right starting point before this article.)

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Calculating Your True Cost of Labor

The first number every contractor needs to know and almost none do is their fully loaded labor cost: what it actually costs the business to put a technician on a job site for one billable hour. This number is almost always higher than the contractor expects, and the gap between what they think it costs and what it actually costs is where margin disappears.

The Components of Loaded Labor Cost

Start with the technician’s base wage. For this example, use $25 per hour. That is not your labor cost. That is where the calculation begins.

Add employer payroll taxes. FICA (Social Security and Medicare) adds 7.65 percent. Federal unemployment tax (FUTA) adds approximately 0.6 percent on the first $7,000 of wages. State unemployment tax (SUTA) varies by state and your claims history but typically runs 1 to 5 percent. At a conservative 10 percent total for payroll taxes, a $25 per hour wage costs $27.50 per hour in cash before anything else.

Add workers’ compensation insurance. In the trades, workers’ comp rates vary dramatically by trade classification and state. Roofing can run 20 to 40 percent of payroll. Electrical and plumbing typically run 5 to 15 percent. HVAC runs in a similar range. At a representative 12 percent rate on a $25 wage, workers’ comp adds $3 per hour. You are now at $30.50 per hour.

Add general liability insurance, if allocated at the labor level rather than overhead. Tools and equipment wear. Vehicle costs. Any benefits you provide. A conservative total for all additional burden factors typically adds another $3 to $7 per hour depending on your trade and benefit structure, landing a $25 per hour wage at a total loaded cost of $33 to $37 per hour.

The Non-Billable Time Factor

Now the number that most contractors skip entirely: non-billable time. A technician on your payroll is not billable 100 percent of the hours you pay them. They drive to job sites. They attend training. They have shop days doing equipment maintenance. They take paid time off. For most field service operations, a full-time technician is billable for 65 to 80 percent of their paid hours on an annual basis. The remaining 20 to 35 percent of their time is cost with no revenue attached to it.

This means that your loaded labor cost needs to recover 100 percent of the technician’s total compensation from only 65 to 80 percent of their hours. If a technician costs $35 per hour loaded and is billable 75 percent of the time, the effective cost per billable hour is $35 divided by 0.75, which is $46.67 per billable hour. That is your true labor cost. If you are pricing labor at $40 per hour on this technician, you are losing money on every hour they work before overhead or materials are even considered.

Owner Labor: The Most Consistently Undervalued Input

If you are a working owner, your own labor is the most commonly underpriced input in the business. Many owner-operators price their own time at their technician’s rate or slightly above, which fails to account for the business management work they do for which there is no billable hour. An owner who spends 30 hours per week in the field and 20 hours per week on estimating, admin, and management has a total work cost that needs to be recovered from only the 30 billable field hours. If you price your field time at $45 per hour and ignore the 20 management hours, your effective billing rate for total work is $45 times 30 divided by 50, or $27 per hour for all work performed. Price your field time accordingly.

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Understanding and Allocating Overhead

Overhead is every cost the business incurs that is not directly tied to a specific job. It is the cost of being in business, regardless of whether the truck runs today. It must be recovered through your pricing, and if it is not explicitly calculated and allocated, it is being paid out of what you are calling profit.

What Counts as Overhead

Vehicle payments and insurance, if not allocated per job. Shop rent or home office costs. Software subscriptions. Advertising and marketing spend. Phone bills. Accounting and legal fees. Licensing and continuing education. Office supplies. The owner’s draw, to the extent it represents management time rather than field production. Any equipment payment or lease that spans multiple jobs.

Add up twelve months of these costs. Divide by the number of billable hours your business generates in a year. The result is your overhead burden per billable hour. If your annual overhead totals $60,000 and your business generates 1,500 billable hours per year, your overhead burden is $40 per billable hour. Every quoted price needs to recover that $40 before a dollar of profit exists.

The Minimum Viable Price Formula

Before any target profit margin is applied, every job has a floor below which invoicing it costs you money. That floor is: direct labor cost (loaded, adjusted for non-billable time) plus direct material cost plus overhead allocation plus any direct job costs (permits, subcontractors, rentals). This is your break-even price for that specific job. Every dollar above this number is gross profit. Every dollar below it is a loss, even if the client writes you a check and you feel like you got paid.

Most contractors who have never done this calculation are shocked by where their break-even actually sits. A job they have been pricing at $850 has a floor of $780. They thought they were making $850. They are actually making $70, and that is before accounting for the time their phone was ringing with questions about the job, the time they spent quoting it, or the follow-up call when the client had a question about the invoice.

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Markup vs. Margin: The Confusion That Kills Profitability

This is the single most common math error in contractor pricing and it costs real money every time it occurs. Markup and margin are two different ways of expressing the same relationship between cost and price, but they produce different numbers, and confusing them consistently results in jobs that appear profitable on paper but fail to deliver the expected return in cash.

Defining the Terms

Markup is the percentage you add to your cost to arrive at your price. If a job costs $1,000 and you add a 50 percent markup, the price is $1,500.

Margin is the percentage of your price that is profit. A job priced at $1,500 with a $1,000 cost has a $500 profit on a $1,500 price, which is a 33.3 percent margin.

The same job. A 50 percent markup and a 33 percent margin. Neither number is wrong. They describe the same transaction from different angles. The problem arises when a contractor says “I want 30 percent profit on this job” and then adds 30 percent markup to their cost. They intended a 30 percent margin. They got a 23 percent margin. On a $1,000 cost job priced at $1,300, they made $300 instead of the $429 a 30 percent margin would have required.

The formula to convert a target margin to the required markup: divide the target margin percentage by (1 minus the target margin as a decimal). For a 30 percent margin target: 0.30 divided by 0.70 equals 0.4286, or a 42.86 percent markup. Apply that markup to your cost and you land at exactly your 30 percent margin target.

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The Three Pricing Models: T&M, Flat Rate, and Value-Based

Every contractor price ends up in one of three structural models. Understanding what each model optimizes for, and what it exposes you to, is essential to choosing the right model for each type of work you do.

Time and Materials

Time and materials (T&M) pricing charges the client for actual hours worked at a set labor rate plus actual materials consumed at cost plus markup. The client pays for exactly what the job required. T&M is the most transparent pricing model and the easiest to justify to a skeptical client. It also transfers all efficiency risk to the client: if the job takes longer than expected because of a complication, the client pays more.

The primary weakness of T&M for the contractor is that it caps your earning potential at your labor rate times hours worked. A technician who gets highly skilled at a particular service type does not earn the business more money under T&M. They just finish faster. T&M also requires accurate time tracking to invoice correctly, and it creates client anxiety on open-ended jobs because the final cost is unknown at the start.

T&M works best for: service and repair work with genuinely unpredictable scope, large commercial projects where the client requires transparency, and jobs where scope discovery is part of the work itself.

Flat Rate Pricing

Flat rate pricing charges a fixed price per defined service regardless of how long the job actually takes. A flat rate for an annual HVAC maintenance visit, a flat rate for a standard bathroom faucet replacement, a flat rate for a weekly lawn mowing service. The price is known before the work starts. The client has no cost uncertainty. The contractor bears the efficiency risk: if the job takes longer than the flat rate was built around, the margin compresses.

This sounds like a disadvantage for the contractor, but it is actually the opposite at scale. When a technician who has performed the same service hundreds of times can complete it in 70 percent of the time the flat rate was built on, the business keeps the difference as additional margin rather than passing it to the client as a reduced T&M invoice. Flat rate pricing converts skill and efficiency into profit. It is how the most profitable service contractors in every trade operate.

Flat rate pricing requires knowing your actual cost to deliver each defined service type, which is where job costing data becomes essential. You build the flat rate from the average cost of performing that service, with enough margin buffer to cover the occasions when the job takes longer than average. Over time the distribution of fast jobs and slow jobs averages out to your target margin. The key is that the flat rate must be built on actual historical cost data, not on what feels reasonable.

Flat rate works best for: recurring maintenance services, standardized repair types where scope is defined before the job starts, and residential service work where clients prefer knowing the price upfront.

Value-Based Pricing

Value-based pricing sets the price based on what the outcome is worth to the client rather than on what it costs the contractor to deliver it. A contractor who installs a custom outdoor kitchen that adds $40,000 in appraisal value to a property is not obligated to price that project at labor plus materials plus a 35 percent margin. The value delivered to the client is a valid pricing input alongside cost.

Value-based pricing is the highest-margin model and the hardest to execute consistently. It requires a clear understanding of what clients value about your specific work, the ability to articulate that value in your proposal, and confidence in your pricing that doesn’t collapse at the first pushback. It works best for contractors who have differentiated their business through specialization, reputation, or market positioning that competitors cannot easily replicate. A generalist cannot charge value-based prices. A specialist with a documented track record can.

Most contractors who add a premium product tier, a warranty package, or a speed-of-response guarantee are doing value-based pricing whether they call it that or not. The client is paying more for a version of the service that costs the contractor marginally more to deliver but is worth significantly more to the client.

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Pricing Materials and Managing Material Cost Risk

Materials are the other side of the job cost equation, and they carry their own pricing risks that pure labor-rate analysis misses.

Markup on Materials

Materials should be marked up. The markup on materials recovers the cost of purchasing, storing, transporting, and managing inventory, and it is a legitimate component of your job revenue. The standard markup range on materials in the trades runs from 15 to 50 percent depending on the trade, the material type, and local market norms. Service contractors in HVAC, plumbing, and electrical typically mark up parts and materials at 30 to 50 percent. Lawn and landscape contractors mark up plant material and hardscape materials in a similar range. Painting and remodeling contractors typically mark up materials at 15 to 25 percent given the higher material cost as a share of total job cost.

Whatever your markup is, it should be consistent, explicit, and reflected in your quotes. A contractor who sometimes marks up materials and sometimes passes them through at cost is leaving revenue on the table inconsistently and creating accounting confusion.

Material Cost Risk on Fixed-Price Jobs

When you quote a fixed-price job that includes materials, you are carrying the risk that material prices increase between the quote date and the material purchase date. On jobs that close and complete within a week, this risk is negligible. On jobs that are quoted in March for installation in June, a material price swing can materially affect the margin. There are three ways to manage this.

First, include a material escalation clause in your contract for jobs with a lead time of more than 30 days. The clause states that material prices are subject to adjustment based on supplier pricing at the time of order, and specifies the maximum adjustment you will absorb versus what triggers a change order. This is standard practice in commercial contracting and increasingly common in residential work.

Second, order materials at the time of deposit for large jobs. A 30 to 50 percent deposit at contract signing funds the material purchase, eliminating the price risk and the cash flow exposure simultaneously. The job costing and deposit collection workflow in a platform like Jobber handles this automatically: the client approves the quote, pays the deposit, and the deposit is tracked against the final invoice.

Third, for material-intensive jobs, get a supplier quote at estimating time and use that locked price in your proposal. Supplier quotes are typically valid for 30 days. If your close cycle is faster than that, you can lock your material cost before the job starts.

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The Quoting Process as a Profit Control System

A quote is not just a document you send to get a job. It is the point at which the job’s profitability is set. Every pricing decision made during the quoting process determines the margin floor for that job. A systematic quoting process is a profit control system. An ad hoc quoting process is a profit leak.

Quote Templates and Consistent Pricing

Saved quote templates for standard service types are the operational version of a flat rate price book. They pre-populate labor hours, material costs, and line item descriptions at your standard pricing for that service type. When a new job of that type comes in, you load the template, adjust for the specific property’s requirements, and the margin is built in from the start.

Templates eliminate the pricing variability that occurs when different people quote the same job type differently, or when the same person quotes inconsistently depending on how busy they are or how much they want the job. They also speed up the quoting process significantly, which matters for contractors competing on response time. A detailed professional quote delivered within two hours of an inspection beats a thorough quote delivered the next afternoon in most residential markets. For a walkthrough of how to build and use quote templates in practice, see our guide on how to create quotes in Jobber.

Scope Clarity as Margin Protection

Scope creep is one of the primary mechanisms through which contractor margins erode after a job is sold. The job was quoted at X. During execution, the client asks for Y. The contractor does Y without creating a change order because the conversation feels awkward or the item seems small. Y gets done. Y doesn’t get charged. The margin on the job drops.

The correction is not to be inflexible with clients. It is to have a documented scope in every quote that establishes clearly what is and is not included, and a simple change order process for anything outside that scope. A change order does not have to be formal or adversarial. It can be a text message or a quote note from the field that the client approves with a reply. What matters is that additional scope is documented and priced before it is performed.

The Follow-Up System as Revenue Recovery

A quote that was delivered but never followed up on is a revenue leak. Most prospects who receive a quote and go quiet are not decided against you. They are busy, they forgot, or they are waiting for one more thing to make the decision. A systematic follow-up sequence that sends a reminder at 3 days and again at 7 days after a quote is delivered recovers a significant share of those conversations. Automated quote follow-up in a platform like Jobber handles this without requiring any manual action from you or your team. The reminder goes out on schedule. The conversion happens or it doesn’t. Either way you didn’t lose the job to inaction.

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Job Costing: The Feedback Loop Most Contractors Skip

Pricing is a hypothesis. You believe a job will cost a certain amount to deliver and you build a price that recovers that cost plus your target margin. Job costing is the process of testing whether the hypothesis was correct. It compares actual job costs against the quote and tells you whether your pricing model is producing your intended margin or not.

Most contractors never close this loop. They quote jobs, deliver jobs, invoice jobs, and collect payment. They look at the bank account at the end of the month and make a judgment about whether the business is doing well. But the bank account is not a margin report. It is a cash report. A business can have a healthy bank balance while systematically losing margin on specific job types because the cash from correctly priced jobs is masking the losses on incorrectly priced ones.

What Job Costing Actually Tracks

Job costing records actual labor hours at their loaded cost against each job, actual materials consumed, and any direct job costs like subcontractors, permits, or equipment rentals. It compares these actual costs to the job’s quoted price and calculates actual gross margin for that job. Over time, aggregating job cost data by service type tells you with precision which types of jobs you price well and which you consistently underprice.

The patterns that job costing reveals are almost always surprising. A contractor who has been doing electrical panel upgrades for ten years discovers they consistently run 15 percent over on labor due to a scope assumption in their standard template that no longer reflects current code requirements. A lawn care company discovers that their commercial mowing accounts are running 8 percent below target margin because their drive time estimate was based on a route that was denser three years ago. These are not things you can find by looking at the bank balance. They require comparing estimated cost to actual cost at the job level.

Job Costing in Practice

Job costing requires three inputs: accurate time tracking at the job level, accurate material cost recording per job, and a quoting system that records what you estimated. Field service management software that handles all three in connected workflows makes job costing practical rather than theoretical. The Grow plan in Jobber includes job costing as a built-in feature that compares estimated vs. actual labor and material costs per job and reports margin at the job level. For contractors who have never seen this data before, the first month of job costing reports is typically the most instructive financial document they have ever produced about their own business. The data directly informs which prices need to go up and by how much.

For the quoting and job management foundation that makes job costing work, see our complete Jobber review and the trade-specific assessments for your industry. Job costing is available on Grow and Plus plans and is one of the primary reasons Grow Team is the recommended plan for established contractors. See Jobber pricing breakdown for the full plan comparison.

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Raising Your Prices Without Losing Your Clients

The moment most contractors dread. You have done the math, confirmed your prices are too low, and know you need to raise them. The fear is that clients will leave. The reality is more nuanced and more survivable than most contractors expect.

Who Actually Leaves on a Price Increase

When a contractor raises prices, the clients who leave first are the most price-sensitive ones. In most cases, these are also the clients with the lowest average job values, the highest service demands, the most invoice disputes, and the worst payment behavior. Losing them is not a disaster. It is often a relief. The clients who stay through a price increase are doing so because they value what you provide beyond just the lowest price. These are the clients you want to build the business around.

The retention data across contractor industries consistently shows that well-communicated price increases of 5 to 15 percent retain 80 to 95 percent of existing clients. Increases above 20 percent in a single adjustment see higher attrition but are often necessary when pricing has been substantially below market for multiple years. The math is straightforward: losing 15 percent of your clients on a 15 percent price increase leaves you with the same revenue. Losing 15 percent of your clients on a 20 percent price increase leaves you with more revenue. And the clients who remain are generating better margins.

How to Communicate a Price Increase

Give clients 30 days notice in writing. Be direct about what is changing and when. You do not owe clients an itemized explanation of your cost structure, but a brief reference to rising costs (materials, labor, insurance, fuel) is both honest and effective at framing the increase as a business reality rather than an arbitrary decision. Acknowledge the relationship and thank them for being a client. Make it clear that your service standard is not changing.

Do not apologize for the increase. Apologizing for a legitimate business decision signals uncertainty and invites negotiation. State it matter-of-factly. Clients who respect your work will understand. The email or letter does not need to be long. It needs to be professional, clear, and delivered with enough lead time that clients feel respected rather than ambushed.

For recurring service clients, the Client Hub in platforms like Jobber gives you a professional communication channel that goes directly to the client’s inbox with your branding rather than from a personal email account, reinforcing the professionalism of the communication at the moment it matters most.

Annual Price Review as Standard Practice

The contractors who never have to make a painful large adjustment are the ones who review their pricing annually and make small adjustments to track their actual cost increases. A 3 to 5 percent annual adjustment tied to your actual cost increases in labor, materials, and overhead is almost universally accepted by established client relationships. It is the contractor who hasn’t raised prices in five years and then needs to make a 30 percent correction who faces the hardest conversation. Build the annual review into your calendar, run the job costing data, and make the adjustment before the gap becomes a crisis.

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Common Pricing Mistakes and How to Correct Them

Pricing to Win Instead of Pricing to Profit

The job you win at a 5 percent margin is worse than the job you lose at a 35 percent margin. The lost job cost you nothing except an hour of estimating time. The won job at 5 percent consumed materials, labor, equipment, and overhead, tied up your schedule for a period of time when something profitable could have been in that slot, and left you with barely enough to cover what the work cost you. A contractor who is losing jobs consistently at their correct price needs a marketing strategy, not a lower price.

Not Accounting for Drive Time and Job Overhead

Drive time between jobs is a real labor cost. The technician is on the clock. The vehicle is running. Nothing is being billed. If your pricing assumes a technician is billable portal-to-portal without accounting for the time between jobs, your effective billing rate is overstated. For service contractors with multiple stops per day, drive time allocation can represent 15 to 25 percent of total paid field time. That time needs to be reflected in your hourly rate or your overhead burden, not ignored.

Failing to Charge for Estimates

For trades where estimating a job requires a site visit and significant professional judgment, giving that time away for free is a pricing decision you may not have consciously made. A detailed bid on a landscape installation or a complex remodel can represent two to four hours of skilled professional time with travel. That time has a cost. Many contractors charge a site visit or estimating fee, credited back at contract signing. This both recovers the cost of estimating and filters out tire-kickers who are collecting bids without genuine purchase intent. The clients who object to a professional estimating fee are often the same clients who would have disputed the final invoice.

Applying the Same Margin to Every Job Type

Not every job type carries the same risk, complexity, or difficulty of execution. Emergency service calls command higher margins than scheduled maintenance because of the immediate response requirement. Jobs with significant material price volatility warrant higher margins than jobs with stable, predictable material costs. Specialty work that requires certifications or expertise competitors don’t have supports higher margins than commodity service work anyone can do. A single flat margin target applied to every job type leaves money on the table on high-value work and may price you out of competitive maintenance work unnecessarily.

Not Tracking Which Clients Are Profitable

Client profitability varies dramatically even within a healthy business. Some clients generate consistently high margins because their properties are straightforward, they communicate clearly, they pay on time, and they never dispute a scope. Others consume disproportionate amounts of your time in callbacks, complaints, change order negotiations, and late payment follow-up. At the same billed rate, the high-maintenance client is substantially less profitable than the low-maintenance one when all time costs are accounted for. Job costing by client over time reveals this pattern. The clients you may think of as your best because they generate the most revenue are sometimes your least profitable when the service cost is fully accounted for.

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Putting It Together

Profitable contractor pricing is not complicated, but it requires discipline about numbers that most trades training never provides. The foundation is always the same: know your fully loaded labor cost, allocate your overhead to every job, understand the difference between markup and margin, choose the pricing model that fits each type of work, and close the loop with job costing data that tells you whether your prices are delivering your intended margins.

The contractors who get this right do not necessarily have lower costs than their competitors. They often have higher prices. What they have is clarity: a detailed understanding of what each job type actually costs, a consistent quoting process that applies that understanding to every estimate, and a feedback loop through job costing that continuously refines their pricing based on actual experience rather than intuition.

The operational infrastructure that makes this practical rather than theoretical is a field service management platform that connects quoting, time tracking, material costs, invoicing, and job costing into a single workflow. Without that connection, job costing requires manual data assembly that most contractors will not sustain. With it, the data is a byproduct of normal operations and the pricing decisions it enables are available on demand. The Jobber review and trade-specific assessments in this series cover how that infrastructure works in practice for each trade category. The free trial guide covers what to test in your 14-day evaluation to confirm the platform fits your workflow before committing. If you are at the stage of building a team around this pricing foundation, growing a one-man contracting business into a team covers the operational transition in full.

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Frequently Asked Questions

What profit margin should a contractor aim for?

Gross margin targets vary by trade but a healthy range for most residential and light commercial contractors is 35 to 50 percent gross margin on labor and materials, with a net profit margin (after overhead) of 10 to 20 percent. Service-heavy trades with lower material costs (HVAC service, electrical, plumbing) often run higher gross margins than project-heavy trades (remodeling, landscaping installation) where material costs represent a larger share of job revenue. The right target for your business is the one that covers all your overhead, pays you and your team adequately, and leaves enough net profit to reinvest in the business and maintain a cash reserve.

What is the difference between markup and margin?

Markup is the percentage added to your cost to arrive at a price. Margin is the percentage of the final price that is profit. A 50 percent markup on a $1,000 cost produces a $1,500 price and a 33 percent margin. A 33 percent markup on the same cost produces a $1,330 price and a 25 percent margin. When you have a target margin in mind, calculate the required markup using this formula: target margin divided by (1 minus target margin). For a 30 percent margin target: 0.30 divided by 0.70 equals a 42.86 percent required markup.

How do I calculate my true labor cost as a contractor?

Start with the technician’s base wage. Add employer payroll taxes (typically 9 to 11 percent of wage). Add workers’ compensation insurance (varies by trade classification and state, typically 5 to 25 percent of payroll). Add any benefits you provide. Then divide this loaded hourly cost by the technician’s billable utilization rate (typically 0.65 to 0.80 for field service operations). The result is your true cost per billable hour. For a $25 wage with a 30 percent burden and 75 percent utilization, the true labor cost is ($25 x 1.30) divided by 0.75, which equals $43.33 per billable hour.

How does flat rate pricing work for contractors?

Flat rate pricing charges a fixed amount for a defined service regardless of actual time required. You build the rate by calculating your average cost to deliver that service type (loaded labor at expected hours, plus materials, plus allocated overhead) and adding your target margin. The rate is set for a defined scope: a specific service on a specific equipment type, a specific repair category, or a standard property size. Over time, jobs that take less than average improve your margin. Jobs that take longer reduce it. The average across many jobs of the same type produces your target margin if the rate was built correctly on accurate cost data.

How do I raise prices without losing clients?

Give 30 days written notice, be direct about the change and the effective date, reference rising costs briefly, and communicate professionally through your standard client communication channel. Do not apologize. Clients who value your work will accept a reasonable increase, especially when it is communicated professionally with adequate notice. The clients who leave on a well-communicated increase are typically your most price-sensitive and often your least profitable. Most contractors who implement price increases report that total revenue is flat or increases, even if client count drops slightly, because the retained clients are on improved margins.

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