Change orders
Price change orders correctly to protect your margins.
Step 1: Total Cost = Labor + Materials + Other
Step 2: Price = Total Cost / (1 - Margin %)
Step 3: Profit = Price - Total Cost
If you price change orders the same way as original bids, you may lose money.
Results
Small change orders still need the same pricing discipline as the rest of the job.
Total Cost
$0.00
Final Change Order Price
$0.00
Expected Profit
$0.00
Margin %
35.00%
Labor: $0.00
Materials: $0.00
Other: $0.00
A change order is any approved change to the original scope of work. It usually adds labor, materials, time, or coordination that was not part of the first price.
Contractors often treat change orders like small add-ons and price them quickly. That usually misses supervision, disruption, procurement time, and the fact that last-minute changes are rarely as efficient as the base scope.
Margin tells you how much of the final selling price remains after cost is covered. If you price from markup when you meant margin, the change order can look profitable while still shrinking the job's actual profit.
Change orders are where many jobs lose their profit. Tracking them properly is what protects it.