How to increase prices in a building business

Choose a work mix that represents the decision

Start with three recognisable job types rather than one exceptional success. You might choose an extension package, fitted joinery and a smaller repair. Each should have a defined scope, a current selling value, direct costs and the hours needed from your team.

Use comparable evidence. A completed repair with recorded costs should not be silently compared with an unfinished installation whose remaining costs are missing. If you use an estimate, label it as an estimate and identify the assumptions needing review.

The workbook treats the current comparison as one job of each selected type. Its proposed scenario has a separate count for each type. Those counts describe a workload you want to test; they are not acceptance percentages or conversion-rate forecasts.

Check whether the period is meaningful for your business. Three jobs might represent a fortnight for one team and several months for another. Use the same period for selected overhead and available hours, or the capacity comparison will lose its meaning.

Review future costs before choosing an uplift

Enter the current direct cost alongside the selling price, then prepare a future direct-cost assumption for the same scope. Check labour, materials, plant and bought work through the relevant estimate. The price review should use that build-up rather than invent a new unexplained total.

Treat an expired supplier price as a question to resolve. A proposed price that uses last year’s cost can create an apparent improvement that disappears when the actual package is bought. Keep the source and review date in the workbook’s evidence field.

Distinguish a cost increase from a scope increase. If the proposed package includes more work, it is not a clean test of charging more for the same result. Either restore a like-for-like comparison or state clearly which scope difference explains the new values.

Avoid double-counting labour or owner time. If a cost already includes the relevant paid work, do not put the same amount into selected overhead again. Ask your financial reviewer to check the cost definitions before interpreting the residual as a business result.

Work through the three-job example

The current extension package sells for £10,500 with £8,400 of selected direct costs. Joinery sells for £4,800 with £3,600 of costs, and the repair sells for £2,400 with £1,800 of costs. Together they produce £17,700 of value and £3,900 of contribution before the selected overhead.

In the proposed example, the extension price becomes £11,550 and its direct costs £9,000. Joinery becomes £5,040 with £3,900 of costs. The repair becomes £2,520 with £1,950 of costs. The proposed one-of-each mix therefore contributes £4,260.

The extension’s price rises by 10%, but its contribution rises from £2,100 to £2,550 because costs also change. The joinery contribution falls from £1,200 to £1,140 despite its higher selling price. Comparing the work types shows which assumption needs attention.

With £1,200 of selected overhead for the comparison period, the current residual is £2,700 and the proposed residual £3,060. These figures cover only the selected inputs. They are not a net-profit forecast and do not include every possible accounting adjustment or business cost.

Test what happens when the workload changes

The worked mix uses 160 hours for the extension, 80 for joinery and 40 for the repair, totalling 280 hours. The period’s available capacity is also 280 hours. This is an explicit assumption about the team’s usable hours, not a recommendation to fill every calendar hour.

The reduced-workload sheet tests one extension and one repair, with no joinery job in that period. At the proposed prices and costs, contribution is £3,120. After the same £1,200 selected overhead, the residual is £1,920, below the current one-of-each example.

That scenario uses 200 hours, leaving 80 hours against the stated capacity. Spare time can be operationally useful, but the workbook does not automatically convert it into another paid job. Test a replacement package only when you have a defined assumption for its value, cost and hours.

A scenario exceeding capacity needs a different review. Extra hours might require a revised programme, bought work or another resource, each with consequences for cost and delivery. Do not treat a capacity warning as permission to assume overtime at no additional cost.

GOV.UK’s business-growth guidance recommends considering price changes alongside cost structure, sales, cash flow and profitability. The workbook addresses selected contribution and capacity. Review payment timing in a cash-flow forecast separately; an improved residual is not proof that cash arrives earlier.

Choose the change you will test

Use the comparison to identify a specific change, such as updating a future joinery estimate or reviewing the price for a defined repair package. A blanket uplift can hide different cost movements across work types. The worksheet does not need every row to use the same percentage.

Keep customer evidence alongside the arithmetic. Review the actual enquiries, offered scope and reasons recorded when work did not proceed. A declined offer may concern timing, specification or suitability as well as price; do not turn every refusal into a conclusion about the rate.

Compare equivalent offers when examining market context. An apparent cheaper price can cover a different specification, supply boundary or programme. The useful comparison names the difference rather than copying an unverified competitor figure into your own cost model.

Choose a review point and record what you will observe: suitable enquiries, accepted scope, actual costs and delivery hours. A small, defined trial gives you evidence to revisit the assumption. It does not guarantee that a particular increase will be accepted.

Communicate a new offer clearly

Apply the reviewed price through the appropriate new offer. Keep its scope, version, validity and total understandable. An internal planning sheet should not overwrite an accepted agreement or quietly alter the document a customer already received.

Where you advertise or offer work to consumers, check the current price-transparency guidance for the actual presentation. The CMA summary explains that prices should be clear and complete, including unavoidable charges. An internal VAT-excluding calculation is not automatically an appropriate customer-facing total.

If the customer asks about a changed price, explain the particular scope and price being offered. Avoid claiming that every supplier cost rose by the same percentage unless your evidence supports it. A clear offer does not need a general story about the entire construction market.

For already agreed work, use the relevant agreement and change process rather than treating this review as authority to impose another amount. Keep the proposed adjustment and the customer’s actual response connected to their specific work.

Complete one review before changing the price list

Replace the blank sheet’s three work types with your own comparable examples. Complete price, cost, hours and workload inputs, then check the selected-overhead basis and capacity period. Unknown inputs should remain questions; the workbook withholds completed outputs when required values are missing.

Inspect the one-of-each and reduced-workload examples before drawing a conclusion from your own result. Record the particular price decision, the evidence behind it and the next review date. The useful outcome is a considered test of the work mix, with costs and capacity visible.