Price a defined scope

Record the roof system, measured quantities, tear-off assumptions, disposal, access, delivery, protection and cleanup. Identify conditions that still need an on-site check. Do not bury unknown decking or other concealed conditions in a confident fixed scope without a documented approach for handling them.

Use current supplier quotes and your actual labor assumptions. Remote measurements and a site inspection answer different questions. A measurement report alone does not establish every condition that affects cost.

Do not confuse markup with gross margin

Markup is profit above cost divided by cost. Gross margin is revenue less direct job costs, divided by revenue. Illustrative example: $8000 of direct costs priced with a 25% markup gives a $10000 selling price and $2000 gross profit. That is a 20% gross margin, not 25%.

To model a chosen gross margin, divide direct cost by one minus the margin expressed as a decimal. At an illustrative 25% margin, $8000 ÷ 0.75 = $10666.67. This is arithmetic, not a recommended roofing price or margin. Gross profit still has to cover overhead and other business obligations; it is not automatically owner take-home pay.

Use an estimate review before sending

  • Are material quantities and quote dates recorded?
  • Are labor, disposal, delivery and required job costs included?
  • Are exclusions and unknown conditions visible?
  • Does the customer understand options and payment milestones?
  • Has the owner approved the price and current version?

A discount comes out of the job economics unless costs or scope also change. Record why a discount is offered and recalculate the result before sending. Do not treat a competitor’s price as evidence that your own scope can be delivered at that price.

Close the loop after the job

Compare estimated and actual quantities, labor hours, disposal and changes. Separate a pricing mistake from an approved change of scope or a productivity issue. Use the difference to update your next estimate rather than blaming every shortfall on sales.

Keep your written proposal aligned with the approved estimate. Review cost classification and overhead allocation with your accountant; consistent definitions matter more than a polished percentage.