Markup is not margin. Know the difference — price every job right.
Markup is the percentage added to the cost price: cost £100, selling price £150, markup is 50%. Margin is the percentage of the selling price that is profit: the same job has a margin of 33.3% (£50 profit ÷ £150 selling price). A 50% markup does NOT give you a 50% margin — this catches out a lot of tradespeople when pricing jobs.
Most trades target a gross margin of 25–40% on jobs (before overheads like van, insurance, tools). For materials-heavy jobs, the margin on materials is usually lower (10–20%) but the margin on labour should be higher (40–60%). Track your margins job by job and you will quickly spot which types of work are most profitable.
Divide your total costs by (1 minus your target margin as a decimal). For a 30% margin: £1,000 costs ÷ 0.70 = £1,428.57 selling price. For a 40% margin: £1,000 ÷ 0.60 = £1,666.67. This is more reliable than adding a fixed markup because the margin stays consistent regardless of job size.
Reply PROFIT or PNL on WhatsApp and GraftG calculates your gross profit: total invoiced minus total receipts (materials, fuel, tools), by month or quarter. Pro plan users (£24/month) get a full profit-and-loss breakdown. Knowing your numbers is the first step to better pricing.
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