How It Works
Three simple steps to get accurate calculations
1
Enter Overhead & Salary
Input your monthly business costs and target annual income.
2
Set Billable Hours
Define realistic billable hours per week and weeks worked.
3
Add Margin Target
Set your desired profit margin for business growth.
4
Get Minimum Prices
See your minimum hourly rate and per-job pricing floor.
Loading Service Business Minimum Price Calculator...
Frequently Asked Questions
How do I calculate my minimum hourly rate?
Formula: (Annual overhead + Salary with benefits) ÷ Annual billable hours ÷ (1 - profit margin). Example: ($18K overhead + $97.5K salary) ÷ 1,440 hours ÷ 0.8 = $100/hour minimum.
What should I include in overhead?
Include: Vehicle costs, insurance, tools/equipment, software subscriptions, marketing, phone/internet, licensing, professional development, office/storage. Typical service business: $1,000-$3,000/month.
How many billable hours are realistic?
Most service businesses achieve 25-35 billable hours per week. Solo operators: 25-30 hours (rest is admin, travel, marketing). With admin help: 30-35 hours. Over 35 is often unsustainable long-term.
What profit margin should service businesses target?
Target 15-25% profit margin. This covers: Slow seasons, equipment replacement, growth investment, emergency fund. Under 10% leaves you vulnerable. Over 30% may price you out of market.
Should I ever price below my minimum?
Rarely. Exceptions: Strategic account that leads to referrals, portfolio/testimonial building, keeping crew busy in slow season. Never consistently price below minimum - it leads to burnout and business failure.
Related Calculators
Explore more tools to help with your business decisions
Results are estimates for informational purposes only. Consult professionals for important decisions.