“ Profit allows you to replace tools, hire help, survive slow periods, and say no to bad jobs.”
BUSINESS AND TRAINING 13
This matters because overheads are paid from margin, not markup. When margins are too thin, the business survives only as long as nothing goes wrong.
Why thin margins are dangerous Every trade business has costs that do not belong to a specific job. Vehicles, fuel, insurance, tools, phones, admin, bookkeeping and compliance all continue whether work is steady or slow.
If margins are too low, one quiet month, one unpaid invoice, or one comeback job can erase weeks of hard work.
Healthy trade businesses typically aim for gross margins between 35 – 50 %, depending on the trade, risk, and level of competition. That buffer allows reinvestment, stability and resilience.
Pricing labour properly Your hourly rate is not what you want to earn personally. It is what the business must charge to remain viable.
Profit has a purpose Profit allows you to replace tools, hire help, survive slow periods, and say no to bad jobs. It also creates a business that has value beyond your own labour.
Before accepting any job, ask one simple question. If you did this job every week for a year, would your business be stronger or weaker?
If the answer is weaker, the price is wrong. PA
“ Profit allows you to replace tools, hire help, survive slow periods, and say no to bad jobs.”
That rate must cover your salary, downtime, non-billable hours, admin time, overheads and profit. If you only charge for time spent on site, you are under-pricing your work.
Travel, quoting, sourcing materials, and follow-ups are all part of delivering a job. They must be priced in.
Materials are not pass-through items Many tradespeople apply little or no markup on materials, believing this is fair. In reality, materials involve time, cash flow pressure, price risk and warranty responsibility.
A sensible markup on materials compensates for those risks. It is not greed. It is good business.
About the author: Rob Burger CA( SA) is a finance and strategy consultant who helps small businesses, contractors and professionals simplify their finances and grow sustainably. He has 30 years of experience in business and now focuses on helping SMEs build stronger, more profitable enterprises. Email robburger @ 2xrconsulting. co. za, or contact + 27( 0) 61 588 0497
Supplied by Rob Burger
April 2026 Volume 32 I Number 02 www. plumbingafrica. co. za