Septic & well
Water Treatment Pricing Calculator
Prices treatment work from cost upward, where the recurring service is worth more than the installation.
Result
Overhead and margin are taken as shares of the selling price, which is why the cost is divided rather than multiplied. Adding 15% to cost does not produce a 15% margin. Gross profit is what is left after the cost of doing the job. Overhead comes out of that: the building, the office wages, the vans, insurance, software and advertising. A healthy gross margin still loses money if overhead is larger.
Get a Free Business AuditHow the calculation works
Direct cost divided by one minus overhead and margin together. What makes treatment pricing different from a one off install is that the equipment creates an ongoing relationship: filters, media, salt, lamps and membranes all need replacing on a schedule, and somebody has to do it. Pricing the installation alone leaves the more valuable half of the work unpriced. A treatment business that sells systems and walks away is competing on equipment price against online suppliers, while one that prices the installation sensibly and holds the service is selling something a website cannot.
What moves the number
- Whether recurring service is part of the offer, since that is where the durable margin sits.
- Equipment cost against what the customer can find the same unit for online, which caps what the hardware can carry.
- Testing, which is a chargeable service in its own right and is the front end of every specification.
- Callback risk, because a system specified without a test generates unpaid return visits.
Where this one goes wrong
Do not price the hardware as though the customer cannot look it up, because they can, and a large markup on a unit with a published price invites exactly that comparison. The defensible value is in the testing, the specification, the installation and the ongoing service, and pricing those properly is more durable than a margin on a box. The related trap is specifying without testing to win a job quickly: a system that does not fix the problem produces return visits you cannot bill and a customer who tells other people. The testing that feels like a barrier to the sale is what makes the sale stick.
Before you quote
- Price testing and specification as services rather than giving them away to win the install.
- Build the recurring service schedule into the offer from the start.
- Check your hardware markup against what the unit sells for publicly.
Questions
About this calculator
Where is the margin in water treatment?
In the testing, the specification and the recurring service rather than in the equipment. Hardware has published prices a customer can find, which limits what a markup can carry. Filters, media, salt and membrane replacement recur indefinitely and are work only somebody on site can do.
Should I charge for water testing?
Yes, and treating it as a free step to win an install undervalues the thing that makes the whole job correct. A proper laboratory panel costs money and the interpretation is professional work. Giving it away also invites specifying without it, which is where callbacks come from.
How do I compete with online equipment prices?
By not competing on the equipment. Someone buying a unit online still has to find out what their water actually needs, install it correctly, sequence it properly and maintain it. Pricing that expertise and service honestly is more durable than trying to hold a markup on a box with a published price.
The formula
price = direct cost / (1 - overhead% - margin%)
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How to use this calculator
- Labour cost ($). Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($). Enter your own figure; the page starts at $120.
- Other direct costs ($). Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%). Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%). Enter your own figure; the page starts at 15%.
The result updates as you type, so you can try a figure, see what it does to price to quote, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Labour cost | $340 |
| Materials cost | $120 |
| Other direct costs | $0 |
| Overhead rate | 22% |
| Target net margin | 15% |
What comes out
| Result | Value |
|---|---|
| Price to quote main result | $730.16 |
| Direct cost | $460 |
| Overhead recovered | $160.63 |
| Net profit | $109.52 |
| Gross margin | 37.0% |
| Markup on direct cost | 58.7% |
Quote $730.16 to cover $460 of direct cost, recover $160.63 of overhead and leave $109.52 of net profit. That is a 58.7% markup on cost.
How sensitive the answer is
Holding everything else steady and changing only labour cost, this is what happens to price to quote. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Labour cost ($) | Price to quote |
|---|---|
| $170 | $460.32 |
| $255 | $595.24 |
| $340 example above | $730.16 |
| $510 | $1,000 |
| $680 | $1,270 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Labour cost ($)
- Burdened: wages plus tax, insurance and the vehicle, not the hourly wage.
- Materials cost ($)
- A money amount, starting at $120.
- Other direct costs ($)
- Permits, disposal, equipment hire, subcontractors.
- Overhead rate (%)
- Overhead as a share of revenue. Work it out from last year's accounts.
- Target net margin (%)
- A percentage, between 0 and 80, starting at 15%.
What the results tell you
| Result | What it is |
|---|---|
| Price to quote | The headline result. A money figure. |
| Direct cost | A money figure. |
| Overhead recovered | A money figure. |
| Net profit | A money figure. |
| Gross margin | A percentage. |
| Markup on direct cost | A percentage. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.