Should You Raise Your Prices This Season? Here’s What Every Contractor Needs to Consider
Material costs are rising, and good labor isn’t cheap. If you’re wondering whether it’s time to raise your prices, this guide breaks it down for small construction contractors trying to stay profitable this season.
It’s the question that rolls around every spring:
“Should I raise my prices this year?”
If you’re a small construction contractor trying to make an honest living, you’ve probably wrestled with it. You don’t want to scare away customers. You don’t want to price yourself out of the game. But you also don’t want to work your tail off and barely break even—or worse, lose money.
So let’s break it down. Here’s what you need to think about before you bump up your pricing this season.
1. Start with the Hard Numbers
First things first: are you actually making money?
If you haven’t reviewed your job costs lately, now’s the time. Look back at a few recent jobs and run the numbers. What were your labor costs, material costs, fuel, rentals, subs, and overhead? Then compare that to what you charged.
If your profit margins are razor-thin or in the red, that’s your answer right there.
A tool like ProfitDig makes it easy to track job costs and spot where you’re losing money. Don’t guess. Know your numbers.
2. What’s Changed Since Last Season?
Prices are always moving—up and sometimes down. Before you make a pricing decision, ask yourself:
- Have material prices increased since last year?
- Are labor costs higher?
- Are you spending more on fuel, insurance, or other overhead?
Even if you want to keep your prices stable for your customers, you may not be able to afford to. If your costs have gone up, your prices probably should too.
3. What’s the Market Doing?
Take a look at your local competition. If everyone else is raising their prices and you’re still charging last year’s rates, you might be leaving money on the table.
Check competitor websites, talk to your supplier reps, and listen to what your customers are saying. If people are used to paying more, you won’t lose them just because your price bumped up a little.
And hey, even if a few customers walk—do you really want the jobs that barely make you anything?
4. Don’t Just Raise Prices—Explain the Value
If you decide to raise your rates, that’s fine. But communicate the value. Make sure your potential clients know they’re not just getting the cheapest guy—they’re getting a professional who shows up on time, does solid work, and stands behind it.
Sometimes a slightly higher price actually builds more trust. It tells people you take your business seriously.
5. Consider a Strategic Price Bump
You don’t have to go all in. Test the waters:
- Try raising prices only on specific services (like your most labor-intensive ones)
- Or bump up your base rate but offer package deals or seasonal promotions
You can always adjust again later if you’re getting too much resistance—or if jobs are flying in and you’re booked solid.
6. Higher Prices Can Lead to Better Clients
This one’s big. When you underprice your work, you often attract the worst kind of clients—the ones who nitpick everything, push deadlines, and always want something for nothing.
But when you charge what you’re worth, you start getting better clients. The kind who respect your time, pay their bills, and tell their friends about you.
Bottom Line
You didn’t get into this business to work for free. Raising your prices might feel risky, but sometimes it’s the smartest move you can make. Know your numbers, pay attention to your market, and trust your value.
If it’s time to raise your rates, do it with confidence. Your business—and your peace of mind—might depend on it.