Pricing jobs right is one of the biggest challenges in any trade business.
A lot of businesses stay busy.
The phones ring.
The team is flat out.
But at the end of the year, the money just isn’t there.
Most of the time, the problem isn’t work —
it’s how the jobs are priced.
One of the biggest mistakes in the HVAC trade industry is using markup instead of margin.
Let’s break it down properly.
Step 1: The Job We’re Pricing
We’ll use the same job both ways.
- Job cost (labour + materials): $5,000
- Overhead cost: 35% (money put towards to run the Business)
- Target margin (if pricing correctly): 45%
Step 2: Pricing the Job Using Markup
Example: 50% Markup
Job cost: $5,000
Markup: 50%
Sale price:
$5,000 × 1.5 = $7,500
What the numbers really look like
Sale price: $7,500
Job cost: $5,000Gross profit: $2,500
Now we pay overheads.
Overhead (35% of $7,500): $2,625
True net result:
Gross profit: $2,500 – $2,625
Profit left: –$125
👉 That’s a loss, not a profit.
Busy job.
Negative result.
Step 3: Pricing the Job Using Margin
Example: 45% Margin
Formula:
Selling Price = Job Cost ÷ (1 – Margin)
Job cost: $5,000
Margin: 45%
$5,000 ÷ 0.55 = $9,091
What the numbers look like
Sale price: $9,091
Job cost: $5,000
Gross profit: $4,091
Now pay overheads.
Overhead (35% of $9,091): $3,182
True net result:
Gross profit: $4,091 – $3,182
Profit left: $909
Net margin: 10%
This job:
Covers overhead
Leaves real profit
Supports a healthy business
Step 4: Side-by-Side Comparison
Pricing Method | Sale Price | Gross Profit | Overhead (35%) | True Net Profit |
50% Markup | $7,500 | $2,500 | $2,625 | –$125 |
45% Margin | $9,091 | $4,091 | $3,182 | $909 |
Same job.
Same effort.
Two very different outcomes.
Step 5: Why This Happens
- Markup looks good on paper but ignores overheads
- Margin accounts for the full business cost
- Without margin, overhead eats profit quietly
This is why so many HVAC trade businesses are busy but have very low profit.
Why brix Is Built Around Margin
brix is designed around margin-first quoting so:
- Overheads are covered on every job
- Profit is clear before the quote is sent
- Every job helps the business grow
No guessing.
No spreadsheets.
No surprises.
Final Takeaway
- Markup can turn jobs into losses
- Margin protects overhead and profit
- A 45% gross margin supports a 10% net profit for many trade businesses
- If you want a strong business, margin is essential
Busy doesn’t mean profitable.
Margin makes it profitable.
Build better.
Price smarter.
Grow with brix