Contractor pricing
Target Profit Calculator
Set the margin you need, then solve for the sale price required to carry that job.
Inputs
Required sale price = Total job costs / (1 - desired margin)
Profit amount = Required sale price - Total job costs
Reverse pricing starts with the margin requirement. The quote is then solved from cost, instead of guessed from habit.
Results
These numbers show the minimum price needed to meet the target.
Required sale price
$23,125.00
Profit amount
$4,625.00
At a 20% target margin, every dollar of quoted revenue does not become profit. Cost is still recovered first.
How reverse pricing works
Start with cost, not with a rough sale number
Reverse pricing means you decide the profit margin first, then solve backward to the price. This keeps the quote tied to a known outcome.
Contractor example
A bathroom remodel with $18,500.00 in total cost and a 20% target margin needs a sale price of $23,125.00. That leaves $4,625.00 in gross profit.
Why guessing leads to underpricing
Margin is not markup
If that same contractor simply adds 20% to cost, the quote becomes $22,200.00. That is only a 16.7% margin. The job starts $925.00 short before delay, waste, or rework.
Small misses compound fast
Underpricing usually comes from omitted burden, informal discounts, and rounding the sale price down to what feels acceptable. Reverse pricing gives you a clear floor before the quote leaves your office.
Related tools
Pricing is more reliable when cost, margin, and approved scope stay in the same record.