A price book is the list of tasks your shop sells, each with a fixed price, the parts it uses and the time it takes. It lets any tech quote the same job the same way, lets the office give a ballpark on the phone, and lets you change prices in one place. Done well, it is the single biggest thing that keeps margin from drifting job to job.
You can buy a generic book, but the prices in it are built on someone else's costs. The method below builds one from yours. If you are still choosing between models, read flat-rate vs time-and-materials first.
Step 1: Work out your hourly cost
This is the number every line depends on, so get it right.
- Burdened labor per billable hour. Take a year of wages, payroll taxes, workers' comp, health insurance and paid time off for your field staff. Divide by the hours they actually billed, not the hours they were paid. That is your burdened labor rate.
- Overhead per billable hour. Take a year of overhead (rent, office wages, trucks, fuel, insurance, software, marketing) and divide by the same billable hours.
- Add them. That is the cost of one hour on a job before parts.
| Example item | Annual figure | Per billable hour |
|---|---|---|
| Field labor, burdened (6 techs) | $549,120 | $68 |
| Overhead | $580,000 | $72 |
| Billable hours (6 x 1,350) | 8,100 | |
| Cost per billable hour | $140 |
These are example numbers for a made-up shop, Harbor Line Plumbing. Billable hours are the number most owners guess too high. Pull them from real timesheets.
Step 2: List the tasks you actually sell
Export last year's invoices and count what you did most. In many shops, a few dozen tasks make up most of the work. Start there; you can add the rare ones later.
Name each task the way a customer would understand it and make the scope clear: "Replace toilet fill valve" not "Toilet repair". Each line should say what is included, so the tech and the customer agree on what the price covers.
Step 3: Set standard hours for each task
Time each task on several real jobs and use a typical number, including setup, cleanup and the walk to the truck. Do not use your fastest tech's best day. Do not use the slowest either. If your book will be used by newer techs, lean slightly toward their time; you will catch up on the fast jobs.
Step 4: Price each line
The formula: price = (standard hours x cost per hour + parts cost) / (1 - target margin). Here the margin is net margin, because overhead is already inside the hourly cost. Example lines at a 20% target:
| Task (example) | Hours | Labor + overhead | Parts | Cost | Price at 20% |
|---|---|---|---|---|---|
| Replace toilet fill valve | 0.75 | $105 | $18 | $123 | $155 |
| Replace hose bib | 1.0 | $140 | $25 | $165 | $209 |
| Replace garbage disposal, 1/2 hp | 1.25 | $175 | $140 | $315 | $395 |
| Replace 50-gal gas water heater, standard | 4.0 | $560 | $1,090 | $1,650 | $2,065 |
The water heater parts line includes the heater, install parts, permit and haul-away; see how to price a water heater install for the breakdown. Prices are rounded up. Check any line with the job pricing and markup calculator.
Step 5: Add add-ons, not padding
Instead of padding every line for the bad jobs, write add-on lines for the conditions that make a job harder: seized shutoff, corroded supply lines, crawlspace or attic access, after-hours, code upgrades. Each gets its own hours and parts and its own price. The tech offers it when it applies, the customer approves it before it is done, and the base price stays competitive.
Step 6: Keep it current
- Parts: re-check supplier costs on your main parts at least every quarter, and right away when a supplier announces an increase.
- Hourly cost: recalculate after raises, new hires, a new truck or a new office lease.
- Hours: compare actual time to standard hours each month. A task that runs long on most jobs needs more hours.
- Margins: look at real margins by task. If one keeps losing, fix its price instead of hoping.
Common mistakes
- Copying a generic book's prices without checking them against your costs.
- Building the hourly cost from paid hours instead of billable hours.
- Leaving out small parts and consumables (tape, solder, fittings, sealant). Add a small consumables line to each task or to the hourly cost.
- Letting techs change prices freely. Give them options and add-ons, and require approval for anything off the book.
- Building 900 lines nobody uses. Start with the tasks you sell every week.
How SWITCHBOARD handles this
The Price Book in SWITCHBOARD holds job names, services, parts and rules. When a supplier price changes, the new cost is drafted into your prices for you to OK, and estimates built from the book show live margin and markup against your target, with missing costs flagged rather than guessed.
Questions people ask
How many items should a flat-rate price book have?
Start with the few dozen tasks you sell most, which often cover most of your work. Add rare tasks as they come up rather than building hundreds of lines up front.
Should I buy a price book or build my own?
A bought book can save time on task lists and hours, but check every price against your own hourly cost and parts costs before you use it.
How often should I update my price book?
Re-check main parts costs at least quarterly and whenever a supplier raises prices, and recalculate your hourly cost after raises or big overhead changes.
Should the price book show different prices for members?
Many shops give maintenance plan members a member price on each line. Build the regular price first, then set the member price so it still covers your costs.