Lot of thoughts on this, but here is how I was taught. For construction/bid rate, figure as closely as you can the fixed overhead you pay just to keep the doors open. Carry out to 1 year, remembering to include all weekly, monthly, quarterly and annual expenses. Divide by 50 weeks for your weekly amount. Divide by 32 hours (you often will not have 40 billable hours. That is your hourly break even number. Add 10 to 20% for your bid rate. May have to lower it some to stay competitive, but do not go below break even. Find out what others are charging for service work and stay somewhere close to them. On a bid job, keep up with change orders and charge them at the service rate. Same thing for add ons and repairs to damaged work.
