Why Labor Rate Is the Most Important Number in Your Business
When it comes to running a contracting business, most owners focus on the big, obvious numbers: equipment costs, material markups, or closing ratios. But there’s one number that quietly determines whether you’re truly profitable or just breaking even…..your labor rate.
Why Labor Rate Matters
Your labor rate isn’t just what you pay your techs per hour. It’s the true cost of having them on the job, which includes things like:
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Wages and benefits
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Payroll taxes
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Insurance
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Vehicles, tools, and uniforms
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Phones, tablets, and software
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Training and certifications
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Overhead like rent, utilities, and office staff
If you’re not calculating and charging the correct labor rate, you risk underpricing every service call, install, or maintenance contract. Even a small gap between what you charge and what it really costs can add up to tens of thousands of dollars lost each year.
The Problem We See All the Time
Many contractors set labor rates by looking around at what competitors charge and then guessing a “safe” number. The issue is, you don’t know if your competitors are even profitable themselves.
What you need is a calculated, data-driven labor rate that ensures every billable hour covers costs and contributes to your bottom line.
Our Free Labor Rate Calculator
That’s why we built a free Labor Rate Calculator. With it, you can:
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Enter your team size and business expenses
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See the full picture of your true labor costs
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Get a recommended labor rate that keeps you profitable
It’s simple, accurate, and tailored to your business. No more guessing. No more leaving money on the table.
How AirMatch Makes It Even Easier
The economy is shifting faster than ever. Wages, insurance, and fuel costs seem to rise monthly…..and your labor rate needs to keep up.
With AirMatch, adjusting your labor rate is simple. You can update it in real time, and the system automatically applies it to every proposal you create. That means your pricing always reflects the true cost of doing business, no matter how much the economy changes.
Bottom Line
Your labor rate is the heartbeat of your business finances. Get it wrong, and you’ll always be playing catch-up. Get it right, and you’ll have the confidence to price jobs knowing every hour is profitable.
And when you’re ready to take the next step, AirMatch gives you the tools to manage labor rates and your entire sales process….with ease.
