An annual pricing review using your own job data

Why review prices every year

Prices that do not change are falling in real terms. Average hourly earnings for production and nonsupervisory employees at US specialty trade contractors rose from $34.26 in September 2023 to $35.74 in 2024, $37.28 in 2025 and $39.05 in September 2026^[1]. That is a rise of about 14% in three years. Insurance, vehicles, software and materials have moved too. A price book that was right three years ago is now quietly losing money on some jobs.

Customers see prices change in their own bills. Consumer prices for gardening and lawncare services, for example, rose 8.8% in the year to September 2026^[2]. Other small businesses are adjusting too: when they faced financial challenges in 2025, 48% of US small employer firms raised the prices they charge^[3]. A yearly review is how you raise prices where the numbers say you must, and only there.

Step 1: pull twelve months of job data

Export every completed job from the last twelve months with these fields. Most field service and invoicing systems can produce it; if yours cannot, start capturing it now and run a smaller review this year.

• Job type or price-book task, as specific as your system allows: 'capacitor replacement' rather than 'repair'.
• Invoiced amount, discounts and any refunds or credits.
• Actual labor hours, including helpers, from clock-in and clock-out.
• Materials and parts cost, and any subcontractor or permit costs.
• Whether it was a callback or warranty visit linked to an earlier job.
• Customer type: residential, member, commercial.

Add the price-book hours for each task if you use flat-rate pricing, so you can compare what the price assumes with what the job actually took. Good job costing habits make this export far easier to trust.

Step 2: calculate margin by job type

1. 01

   Cost the labor

   Multiply actual hours by your current fully burdened labor rate, not last year's. Use the rate you will be paying next year if raises are already agreed, and include benefits, which made up 30.0% of US private employer compensation costs in June 2026^[4].

2. 02

   Add materials and other direct costs

   Use current replacement cost for materials where prices have moved since the job.

3. 03

   Calculate gross margin per job type

   Total revenue minus total direct cost, divided by total revenue, for each job type with enough volume to matter.

4. 04

   Add callback cost

   Charge callback and warranty visits back to the job type that caused them.

5. 05

   Rank

   Sort job types by total gross profit and by gross margin. The first shows what matters most to the business; the second shows where prices or methods are weakest.

Focus on job types with real volume. A task done three times a year can wait; one done three hundred times deserves careful attention.

Step 3: read margin against close rate

Margin alone does not tell you whether to raise a price. Combine it with how often customers accept the quote for that job type.

Close rate needs enough data to be reliable, and it depends on how the option was presented. A low close rate on a well-priced task may mean techs are not explaining it well. Check with ride-alongs before cutting a price.

Step 4: fix the cause, not only the price

For each job type below target, work through the possible causes in this order:

1. Labor time: if jobs consistently take longer than the price book assumes, either the estimate is wrong or the method is. Update the hours, or train for the faster method.
2. Scope creep: techs adding small items without charging. Write the scope into the task description and price the common add-ons separately.
3. Materials: price-book material costs that have not been updated. Refresh them from current supplier pricing.
4. Minimum charge and trip fee: small jobs often lose money because drive time and setup are not covered. A minimum charge fixes many of them at once.
5. Discounting: if most jobs of a type are discounted, the discount is the real price. Remove it or reflect it honestly.
6. Price: after the above, raise the price to restore the target margin.

Hourly versus flat-rate pricing affects which levers work. For trades that still price by the hour, our comparison of hourly and job-based handyman pricing explains the trade-offs.

Example: an electrical contractor's review

Example (fictional): an electrical contractor reviews 2,900 completed jobs. Three job types stand out. Panel replacements earn a 31% gross margin against a 45% target, with a close rate of 72%. Outlet and switch repairs earn 58% but take an average of 1.6 hours against 1.0 in the price book. EV charger installs earn 49%, on target.

Example findings: panel jobs include permit and inspection time that is not in the price, and failed inspections lead to unbilled return trips. Outlet repairs run long because techs routinely fix a second outlet for free. EV chargers are fine.

Example changes: panel replacement prices rise by about 12%, with permit handling priced as its own line; outlet repairs get a clearer scope and a priced add-on for each extra device; the minimum charge rises in line with labor costs. EV charger prices get only the standard labor adjustment. The owner projects gross profit up about 6% on the same volume.

Step 5: roll out the changes

• Pick an effective date, usually at the start of a quarter or a season, and update the price book, website and any printed materials together.
• Brief techs and the office first, with the reason for each change. People defend prices they understand.
• Honor quotes already given for their stated validity period.
• Tell service plan members before their renewal if plan prices change, with what the plan includes.
• Watch close rates by job type for the first eight weeks and be ready to adjust.

Our guide to raising prices with customers covers how to explain changes to existing clients without losing them.

Pricing recurring and seasonal work

Recurring services need slightly different treatment. For pest control, lawn care and cleaning, the review should look at price per visit by route and plan type, the cost of retreatments or re-cleans included in the plan, and how many customers are still on old rates from years ago. Long-standing customers on legacy prices are often the least profitable accounts on a route, even though they are the most loyal.

Seasonal trades should check whether prices reflect demand. A tune-up offered at the same price in the quietest and busiest weeks fills the busy weeks, when you least need it. Some companies price shoulder-season maintenance more attractively to shift demand, and keep full prices for the peak. Whatever you decide, write it into the price book so the office applies it consistently rather than negotiating case by case.

Mistakes to avoid

• Raising every price by the same percentage. It overcharges where margins are already healthy and under-corrects where they are not.
• Using last year's labor rate to cost jobs. Your review will be out of date before it is finished.
• Ignoring callbacks. A job type with a good margin but frequent return visits may be losing money once those visits are counted.
• Changing prices without telling the team. Techs who are surprised by a new price present it badly.
• Reviewing and never checking. Look again at close rates and margins two months after the change.

Making it a routine

Put the review on the calendar for the same month every year, ideally just before your busiest season, when the new prices will be tested by the most jobs. Keep a running list of pricing questions through the year from your weekly scorecard and job cost reviews, so the annual review starts with known problems rather than a blank sheet.

Do not forget the cost of getting paid. Card processing fees rise with prices, because most are a percentage of the transaction. Review your processing costs at the same time; our guide to credit card processing fees explains the options. If you are investing in equipment or a new truck after the review, the same numbers support a financing application; see SBA loans and equipment financing. And if you belong to a peer group, compare your margin by job type with theirs, without discussing current or future prices.