Start with your time, not the neighbours' prices
The most common way to price a round is to find out what another trader charges and copy it. It's quick, and it often leaves people working full days for a poor wage, because their costs, their travel and their speed aren't the same as that trader's.
A better way takes ten minutes. Work out what an hour of your time has to earn, estimate how long each job takes, and add what it costs you to do it. Everything after that is the same sum.
Step 1: what does an hour have to earn?
Work backwards from the income you want. Add what the business costs to run, then divide by the hours that actually earn money.
- Income you want from the business: £28,000 a year, before tax
- Costs of running it (insurance, van, kit, phone, software): £4,000 a year
- Total to earn: £32,000
- Hours you could work: 40 a week × 44 weeks (holidays and bad weather taken out) = 1,760
- Hours that actually earn: about three-quarters of that, because loading, quotes and admin don't pay = 1,320
Hourly rate: £32,000 ÷ 1,320 = £24.24, so call it £25 an hour
The income you want is before income tax and National Insurance. Setting some aside for tax is covered in registering as a sole trader.
Step 2: how long does one job really take?
Time yourself on a handful of typical jobs. Include the walk from the van, the set-up and the packing away, and add a few minutes for the drive to the next one. Travel is the time most traders forget, and it's often the difference between a good day and a bad one.
Step 3: the price
Multiply the time by your hourly rate, add the materials, then round up to a price that's easy to say.
- 15 minutes on site + 5 minutes between stops = 20 minutes
- 20 minutes at £25 an hour = £8.33
- Add £0.50 for materials = £8.83
Price: £9
Do the same for a small, a medium and a large job and you have a price list you can defend.
| Size | Time with travel | Price |
|---|---|---|
| Small | 15 minutes | £7 |
| Medium | 20 minutes | £9 |
| Large | 40 minutes | £18 |
Set a minimum
Some jobs will come out at a price so low that they aren't worth the trip. Set a minimum charge so a tiny job, or a house a long way off your route, still pays for itself. If someone won't pay the minimum, the round is better without them.
What changes the price
- Size and effort: more to do takes more time
- Access: gates, long drives, awkward gardens and hard-to-reach places
- Condition: the first visit to a neglected property costs more than the tenth
- Distance from your round: a job out of your way costs you travel time
- How often: a regular customer on a fixed day is worth a better price than a one-off, because they fill your diary
Check it against the street
Only once you have your own number should you look at what others charge. If you're well under, you may be leaving money on the table. If you're well over, check your times, and be ready to explain what the customer gets for the extra.
Raising prices on customers you already have
Most traders review prices once a year. Tell customers in writing, give them a few weeks' notice and say the new price and the date it starts. A short, friendly message works.
Hi [name], a quick note from [business]. From [date] the price for your visits will be £[new price] (it's been £[old price] since [month]). Costs have gone up and I want to keep the same standard. If you have any questions, just reply. Thanks for your custom!
A few customers may leave. That is usually fewer than you expect, and it frees up time for better-paid work.
Keep each customer's price on their card
In Rounds every customer has their own services, their own price and how often you go.