How to Bid on Plumbing Jobs in 2023: The Ultimate Guide

Main Types of Plumbing Pricing

When bidding on plumbing work, contractors are on two main types of pricing models. While both have pros and cons, deciding on the right one comes down to the specific needs of each plumbing business.

Type #1: Hourly

This pricing model (also known as time and material pricing) allows plumbers to quote a rate per hour and material costs. Some businesses choose an hourly rate because they believe it can generate more profit than other pricing models. 

The main upside of hourly pricing is that it's flexible and can be adjusted according to job scope changes. On the downside, however, this type of pricing can be challenging to monitor and control, as it’s hard to accurately predict the amount of time a job will take.

Moreover, many customers prefer to avoid uncertain prices and may feel they are being tricked into paying more than necessary. This concern may lead to more complaints about techs taking breaks or needing to work faster. 

Type #2: Flat rate

Flat-rate pricing allows contractors to quote a fixed cost for a job, regardless of how long it takes to complete it.

The main advantage of flat-rate pricing is that customers can easily understand and appreciate the total cost of a job, as it is not tied to the number of hours worked. Plus, techs who work with flat-rate pricing tend to get the job done more quickly and efficiently, which could leave room for more bookings.

One potential drawback of flat-rate pricing is that it can be difficult to manage since it relies heavily on accurate estimates to calculate costs correctly. If an estimate is off, it can lead to losses for the contractor. 

To help plumbing contractors avoid this, we've created this free flat-rate plumbing price list template. Using a structured price list template, office staff and field techs can create more accurate estimates that don't hurt their earnings.  

 However, as outlined below, there's more to efficiently bidding on a plumbing job. 

Factors That Can Affect Your Plumbing Estimates

When pricing your plumbing work, specific factors can influence your estimates. Here are some of the most common:

Factor #1: Industry standards

You need to take into account plumbing industry standards when giving a plumbing estimate to avoid underpricing or overpricing your work. A quick market study and looking at what other plumbing contractors charge in your area for similar services will help you create more accurate bids. 

For example, the average cost of repairing a leaky faucet is usually around $75-175, depending on the region. If you're charging by the hour, the average rates are between $45 and $200 per hour.

These are some types of industry standards you want to take into account when creating your estimates.

Factor #2: Salaries and labor rates

Besides considering plumbing industry standards, good job estimates also consider plumber salaries and labor rates. This is important because it will help you make sure that you are covering your costs while also ensuring that you are earning a decent profit.

For example, if your plumbing techs are paid $20 an hour, you should ensure the job rate reflects this cost. If not, then you could be losing money on each job.

You can easily calculate labor costs with ServiceTitan's Labor Rate Calculator to ensure you know how much an employee costs the company and how to create your estimates accordingly.

Our labor rate calculator allows plumbing contractors to calculate a billable hourly labor rate that covers their actual cost of doing business and then calculate the best billable labor rate for generating net profit goals.

Factor #3: Materials and other expenses

The cost of parts and supplies should be included in your estimates, or you risk losing money on the job.

For example, if you’re repairing a clogged drain or replacing a plumbing fixture, you might not require high additional expenses. 

But if you create a bidding process for larger jobs requiring specialized parts, such as a commercial-grade tankless water heater or an industrial pump, you should factor these in. The cost of these items can add up quickly, and if you don’t include them in your estimates, you could be losing money on the job.

Considering these factors when creating your estimates can help you accurately price your plumbing jobs and ensure you don't end up losing money.

Tips on How to Bid on a Plumbing Job

Top plumbing businesses know that many things go into accurately bidding on a plumbing job. Here are some in-depth tips for creating the best plumbing estimates possible and boosting your profits.

Tip #1: Show more empathy

Zelena Brown, VP of Operations at Britton WaterWorks Plumbing, southwest of Houston, says one of the most important traits a plumber can have is empathy.

Brown leads a family-owned company, with her husband as the master plumber, but before she joined the family business 11 years ago, she worked in human resources.

That career gave her insight into people. To get insight into plumbing, Brown has become an apprentice plumber and intends to test for tradesman, journeyman, and master.

She says that training allows her to go into the field with a great understanding of what needs to be done and how to deal with an upset customer. It’s something she says she does better than male plumbers.

“If the customer starts crying, [male plumbers] don't really care, they just want to do the repair,” Brown says. “That's where I come in and we have a little bit of finesse and patience, and gentleness to help them get through some of their situations.”

Much of the anxiety customers feel when facing a plumbing problem — and the associated cost — is because they don’t understand plumbing processes. They think it’s simple when it’s not, Brown says.

“You do have some customers who can be taught, and then you have customers who are just so overwhelmed, there's a mind block, and they can't even absorb what you're saying,” she says.

Brown has found photos of previous repairs helpful — along with a heavy dose of empathy. 

“Because plumbing customers are oftentimes so frazzled,” she says, “it's important to use empathy, adjust your tone of voice, and be ready to deal with a wide range of emotions.”

But can a plumber be taught to express empathy and to take time to explain what’s necessary? Or is it necessary to hire for those skills?

It’s a combination, says another plumbing company owner.

Tip #2: Find the right fit

Nikolai Matveev, one of the owners of Cardinal Plumbing, Heating & Air in Northern Virginia, tries to match the skills of his plumbers to the tasks he assigns to them.

Some are better at new installations, while others are more skilled at diagnosing and solving a problem or figuring out where a leak is coming from. Others excel at sales, turning proposals and estimates into work orders.

Finding the right match, Matveev says, is essential.

“There is more communication [necessary] on the repairs than actually the skill and how to do the job, because you're going to have to explain [the job] fairly well — and then you have to justify the price,” Matveev says. “You have to be almost part-salesman, so you're going to have to sell your job first before you even do the job.”

Matveev says it can be hard to be both communicator and technician, so sometimes it makes sense to divide and conquer, particularly with bigger jobs. Matveev sometimes sends his plumbing manager to do estimates for larger projects, such as water- or sewer-line replacements, to smooth the process.

But regardless of the size of the project, it’s essential to provide an accurate estimate for your business and the customer. How should the plumbing cost be estimated to ensure that fairness?

Tip #3: Work backward on your plumbing cost estimates

Estimating plumbing services pricing is easiest if you work backward. Let’s go through it step-by-step:

• Start with how much you, or a plumber in your business, needs to make in hourly wages each week. For our purposes, we’ll assume $1,000.

• Divide that by the number of billable hours in each 40-hour week. With travel time, paperwork, and other issues factored in, that works out to somewhere around 28 hours per week. So, $1,000 divided by 28 is $35.71 per hour.

• The cost of taxes, insurance, vacation time, retirement plan, and more for each plumber must be added, So we’ll round up to $50 per hour.

• Add overhead costs — the cost of your shop, truck expenses, and upkeep — at about 30 percent of the hourly employee rate, or $15 per hour. That puts us at $65 per hour just to keep your business running.

• Add a profit markup of 25 percent, or about another $16 per hour, and we’re at $81 hourly rate for quotation purposes. With average hourly rates for plumbers, according to HomeAdvisor, ranging from $65 to $200 per hour depending on location and circumstances, that rate is reasonable in many areas. Study the hourly rates of experienced plumbers near you to determine whether you are in the right ballpark.

To make estimating plumbing services pricing even easier, we've created a free plumbing estimate template for you to download and customize. This template contains contact information, details of the plumbing project, and payment information (credit card details) to ensure any small or large job is accurately priced and documented.

Tip #4: Make plumbing estimates easier with the right software

How can your business spend less time on administrative duties and more on serving your customers?

The answer lies in automation. More precisely, the right plumbing software solution can take many repetitive, everyday duties from your hands so that you can focus on more critical tasks.

Here at ServiceTitan, we have designed a plumbing software solution to help plumbing contractors streamline their processes and grow their businesses. 

From the original phone inquiry to billing and payment, ServiceTitan's software supports the customer and revenue goals for Matveev and thousands of other plumbing contractors nationwide.

Among the benefits:

• Integration for outstanding customer experiences — from service history and customer support from the initial phone call to dispatch and estimate to acceptance of completed work and billing.

• Automation throughout those processes increases efficiency and revenue.

• The ability to customize scripted questions for customer service representatives gathering key information.

• Features, complete with pictures from the visit, that help plumbers explain the problem and possible solutions, including any unexpected discoveries not included in the original estimate.

• ServiceTitan’s Pricebook Pro, built with industry input, provides prices for thousands of items and easy, touchscreen production of estimates on a mobile tablet, with items arranged by category.

• That pricebook allows plumbers to create multiple estimates at different price points, complete with pictures and descriptions, to give the customer “good, better, and best” choices. These choices mimic the online shopping experience that many of us are accustomed to.

• Your business can be run anytime, from anywhere, from inventory control to accounting.

Tip #5: Make it a business case

Not many people would say sales skills are essential in the plumbing industry. However, being as thorough and professional as possible with your estimates when bidding for a new job will help you stand out. 

This means that you need to provide the customer with an estimate for the job and explain why your services are worth the cost. By taking the time to explain to the customer all of the work that will be done and its total cost, you are demonstrating your expertise and assuring them that they are making an informed decision.

Bear in mind that there is more to this process than simply presenting a price. You can make your bid stand out by offering additional services such as extended warranties or discounts for repeat customers. This will give the customer peace of mind and make them feel you care about their needs.

The bottom line is that providing a pricing estimate often goes hand in hand with selling yourself and your business. By presenting the customer with a detailed quote and going the extra mile to ensure they understand what they are getting for their money, you put yourself in an ideal position to win that job.

Tip #6: Make sure to review your proposals

A good strategy is to cross-check your plumbing proposals once they are done. A senior employee with experience and insights in the industry, usually does this. Relevant things to review are quantity takeoffs, formatting, or expenses, and comparing prices to similar past projects is also worth considering. 

Making proposal reviews part of your estimating process will ensure that your bids are accurate and reliable. This will help you land more jobs since customers often go for the most detailed and comprehensive proposals.

Tip #7: Consider something extra in your bid

Many plumbing contractors know that plumbing jobs are often unexpected. Whether there are costs that may have slipped through when creating estimates or unpredictable costs arise all of a sudden, factoring in something extra protects the plumber's profit margin.

This doesn't mean you should always add “padding” to your quotes. However, if there's a chance that the job might require more materials or labor than initially planned, it's best to be prepared for this and include something extra in your bid.

These tips that best-in-class plumbing contractors use to bid on their plumbing jobs will help you create more accurate estimates that won’t hurt your profit margins.

Things to Consider When Coming Up With a Plumbing Estimate

After learning top tips on how to bid on plumbing jobs, you’re ready to price individual jobs. 

This plumbing estimate example provides some guidelines on things to consider:

• Make sure your estimate is based on a site visit, not just a block of time or a flat fee provided over the phone for a common issue. You never know what you’ll find.

• Some plumbers provide free estimates, while others prefer a trip or service fee for a home visit. You’ll need to factor your policy or preference into the cost of the job.

• The cost of fixtures and basic materials is usually straightforward. If a customer needs a new toilet, offering a few options at various prices is easy, right from the ServiceTitan app.

• Consider the cost of necessary permits, debris removal for larger jobs, and other expenses, such as concrete work.

• Estimate the number of billable hours required to do the work to produce an accurate estimate.

• When you present the proposal, educate the customer on what’s included in your estimate and what’s not. This is particularly important in older homes or those that haven’t been maintained well, where you could discover existing code violations, deteriorated pipes that should be replaced, or other problems. These discoveries are never pleasant for the homeowner, but they go down easier if you have prepared them for the possibility ahead of time.

Now Over to You

The tips and strategies provided in this article should have shed light on how to efficiently bid on plumbing jobs. 

With these insights and a plumbing software tool like ServiceTitan, plumbing contractors can improve their estimates and grow their businesses rather than worry that they are underbidding on jobs and making less profit.

ServiceTitan helps residential and commercial home service businesses of all sizes manage their jobs, track customer relationships, and make improvements to increase business efficiency. With automated workflows, real-time data tracking and analytics, and powerful back-office integration capabilities, ServiceTitan has revolutionized the way home service businesses operate.

ServiceTitan is a comprehensive software solution built specifically to help home service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our cloud-based platform is used by thousands of electrical, HVAC, water treatment, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.

Ready to learn more about what ServiceTitan can do for your business?

Contact our team to schedule a demo today.