Sample lesson 3: Pricing a job

Free sample lesson 3 of 8 from the course AI for Small Business Owners (in preparation). It is still being tested with real people. Check every step against your own work.

What you will be able to do

Work out what a job really costs you and set a price you can explain, using a simple spreadsheet. The spreadsheet does the sums. AI helps you set it up and double-check it.

Before you start

• A past job you remember well, with the price you charged.
• A spreadsheet app on your phone or computer, or our free job pricing sheet.
• Use your own currency throughout.

Whatever you sell

This works for products and for services:

• You make or sell things (clothes, food, printed items, repairs with parts): list the materials or stock that go into one item or job.
• You sell your time or skill (freelancing, tutoring, consulting, styling): materials may be close to zero. Your time, running costs and profit matter most. Count the hours you spend on the job, including messages, meetings and corrections, not only the hours of “real work”.
• You do both: price the product and the service parts separately, then add them.

Step 1: List the four parts of a price

1. Materials, plus an allowance for waste (offcuts, spoiled prints, mistakes).
2. Your time: hours for the job times an hourly rate you set.
3. Running costs: a fair share of rent, power, data, transport and tools.
4. Profit: the share of the price you want to keep.

Step 2: Set up the sheet

If you do not use our sheet, ask the AI to design one:

I run a small business. Design a simple spreadsheet to price a job from: a list of materials with quantity and cost each, a waste percentage, hours and hourly rate, running costs for the job, and the profit I want as a percentage of the selling price. Tell me what to put in each column and the exact formulas to use. Keep it simple.

Build it yourself in your spreadsheet. The spreadsheet calculates. Do not ask the AI to do the arithmetic for you.

Step 3: Know the difference between margin and markup

Profit as a share of the price is a margin. Profit as a share added to the cost is a markup. They give different prices. Example only, not real prices: cost 6,900. A 30% margin gives 6,900 divided by 0.70, about 9,857, so you might charge 9,900. A 30% markup gives 6,900 times 1.30, which is 8,970. Choose one method and stay with it.

Step 4: Test it on a past job

1. Enter the materials, hours and costs of a job you already did.
2. Compare the sheet’s price with what you charged.
3. Check one row by hand with a calculator.

If the sheet says you undercharged, ask why: was it your time, waste, or running costs you forgot?

Step 5: Keep a dated material price list

Prices change. Keep a list of your main materials, the price each, and the date you last checked it. Update the sheet when a supplier changes a price. Do not trust old prices.

Step 6: Use AI as a second pair of eyes

Without private customer details, ask:

Here are the lines of my price sheet and the formulas. Look for mistakes, missing costs or anything that looks unreasonable. Do not change anything. List your concerns.

Decide yourself which concerns are real. The final price is always your decision. Also decide how much room you have to negotiate.

Measure it

Re-price five past jobs. Count how many were priced too low, about right, or too high. Use that to decide whether to change your prices, and write down how long each pricing took before and after.

Practice task

Price one past job with the sheet and compare it with what you charged. Write down what you learned.

Previous: sample lesson 2. Related free guide: build a simple pricing calculator. Questions? Tell us on the contact page.