The hourly rate you copied is lying to you
Most owners set their rate the same way: find out what the shop across town charges, knock a few dollars off to win work. That number is a trap — it encodes their costs. Their truck payment, their insurance, their helper's wage. Not yours.
Here is the uncomfortable truth: you cannot know whether a rate is profitable until you know what an hour of your work costs you before you earn a cent on it. Most owners have never done that arithmetic. The ones who have are usually shocked.
A worked example
Say your fixed costs — truck, insurance, phone, tools, software, license fees — come to $4,200 a month. Say you bill 25 hours in a typical week, about 105 a month; the rest of your time goes to driving, quoting, and paperwork.
Your overhead alone is $40 for every billable hour — before you pay yourself a dime.
Charge $85 an hour and pay yourself $35, and your "profit" is $10 an hour. One call-back, one slow week, one truck repair, and it's gone. That is how a fully booked business goes broke slowly: the calendar is full, and the arithmetic is losing.
Do the math tonight
- List every monthly cost that exists whether or not you work: vehicle, insurance, phone, tools, subscriptions, licenses.
- Count your actual billable hours from the last four weeks — from invoices, not memory.
- Divide. That number is your overhead per billable hour. Write it where you can see it.
Three lines of arithmetic, one evening, and you will know something most of your competitors don't: what your time actually costs.
Where this goes next
This is the first lesson of Price It Right, the opening course at TradeForge Trade School — short, practical courses on the business side of the trades, each one ending in a worksheet you fill in with your own numbers. Create a free account and you'll be first to hear when the doors open.