How to Build a Flat Rate Price Book, Step by Step

To build a flat rate price book, start with the 20 or so jobs you do most, work out what each one really costs you (labor, parts and overhead), and price each one to a target margin rather than a markup. Then put the list in one place your whole team quotes from, and set a date to review it.

That's the short version. The rest of this post walks through each step with a worked example, so you finish with prices you can defend, not numbers you copied from the shop down the road.

Step 1: Pick the jobs that pay the bills

Don't try to price everything. Pull the last 12 months of invoices and count how often each kind of job shows up. For most service shops a short list does most of the work. For an HVAC shop, that's tune-ups, capacitor and contactor swaps, blower motors, igniters and drain line clears. For plumbing, it's drain cleaning, toilet rebuilds, faucet swaps, and water heater flushes and replacements.

Price those first. Twenty well-priced jobs you can quote next week beat 400 half-finished ones you'll get to eventually. Add the long tail as jobs come in.

Step 2: Write down what the job includes

A flat rate only works if everyone agrees what it covers. For each job, write one or two lines:

• What's included (part, labor, a system check, cleanup)
• What's not (access problems, code upgrades, a second failed part)

Name the job the way a homeowner would say it. "Replace AC capacitor" beats "CAP-45/5 R&R". Your techs will read it off the list in front of the customer, and the customer will read it on the quote.

Step 3: Work out what an hour really costs you

This is where most price books go wrong. A tech who earns $32 an hour doesn't cost you $32 an hour.

Start with the tech's loaded cost: wage plus payroll taxes, workers' comp, benefits and paid time off. Then add overhead: the truck, fuel, insurance, the office, software and your own salary. Spread that overhead across the hours your techs actually bill, not the hours they're on the clock.

Here's a worked example. The numbers are illustrative, not a benchmark, so use your own:

• Loaded tech cost: $45 per billable hour
• Overhead: $60,000 a month, spread over 1,000 billable hours, is $60 per billable hour
• Cost of one billable hour: $105

If your overhead is a mystery, your bookkeeper can give you last year's total quickly. That number matters more than any price you'll set.

Step 4: Time each job from real jobs, not best cases

Look at how long each job actually took on your last 20 invoices, and use the typical time, not the fastest one. Your best tech's 40-minute capacitor swap isn't the number. Your average tech's 70 minutes, including the conversation at the door, is.

Leave travel out of the task time and charge for it separately. There's more on that in how to charge for travel time.

Step 5: Add parts at your cost

Add what the parts cost you, including shipping and the ones that go missing from the truck. Don't mark the part up here. The margin in step 6 does that for the whole job.

Step 6: Price to a margin, not a markup

This is the step that decides whether your price book makes money.

Say a capacitor swap takes 1.5 hours and uses a $38 part:

• Labor: 1.5 × $105 = $157.50
• Parts: $38
• Total cost: $195.50

The markup way. "Add 50%": $195.50 × 1.5 = $293.25. That sounds like a 50% margin, but it isn't. Your gross profit is $97.75 on a $293.25 price, which is a 33% margin.

The margin way. Decide the margin you need, then divide: price = cost ÷ (1 − margin). For a 50% gross margin, that's $195.50 ÷ 0.5 = $391.

The gap between those two prices is about $98 on one small repair. Across a year of capacitor swaps, that's the difference between a good year and wondering where the money went.

What target margin should you use? That depends on your overhead, your market and what you want to take home. The only wrong answer is not picking one.

Step 7: Sanity-check against your market, then stop

Once you have your number, look at what shops near you charge for the same job. If you're far below, you're leaving money on the table. If you're far above, ask whether your scope is bigger (you include a full system check they don't) and say so on the item.

But don't start from a competitor's price. They might have lower overhead, or they might be losing money on it.

Step 8: Decide what stays on time and materials

Some work doesn't belong on flat rate: leaks behind walls, intermittent electrical faults, anything where you won't know the job until you open it up. For those, a flat diagnostic fee plus a quote, or straight time and materials, is fairer to both sides. We break it down job by job in flat rate vs. time and materials.

Step 9: Put it in one place, and quote from it

A price book that lives in a spreadsheet on the office computer isn't a price book. It's a suggestion. It works when it's the only list:

• Every quote pulls from it, so two people quote the same job at the same price.
• Your online booking page shows it, with "from $X" where you can, "free estimate" for installs and "quoted on site" where you can't. That matters: in a 2024 survey reported by ACHR News, 70% of homeowners said they were more likely to call an HVAC contractor who is transparent on pricing.
• A service carries the materials it always uses, so a five-part job isn't rebuilt by hand on every quote.

That's what the FSM Navigator pricebook does. It's one list of services, labor and materials that your quotes and your booking page read from, inside the same app you dispatch and invoice from. You can build one during a 14-day Pro trial.

Step 10: Put a review date on the calendar

Prices go stale. Parts costs move, wages go up, and a job you thought took an hour keeps taking two. Pick a date, quarterly if parts prices in your trade move fast and at least twice a year otherwise, and walk the top 20 again. Change a price once, in one place, and move on.