Pricing and quoting, 29 October 2026
Why big domestic jobs have the thinnest margins, and how to protect them
Big domestic jobs have thin margins because the risks grow with the job while the percentage you add stays the same. Overruns cost more days, small changes go unpriced, your own management time isn't charged, and you fund materials before you're paid. On a £48,000 extension, a week's overrun and a handful of free extras can halve the profit. Price the risks, record every change and stage the payments.
Why do bigger jobs make less money?
Because a bigger job has more places to lose money, and they compound. A carpentry and building firm in Cambridge, a limited company in its first year, told us large domestic jobs have "the least margin". A renovation and extension builder with four or five staff put it more starkly: "I don't know if I'm making money on jobs." Both were winning big work. Neither could see where the profit went until the job was over.
These are the usual leaks, roughly in order of size:
- Overrun days. Labour and prelims (scaffold, skips, welfare) are charged by time. Every extra week costs the full weekly burn.
- Unpriced variations. The client asks for an extra socket, a moved doorway, a better tile. Each one is small; together they're not.
- Management time. Ordering, calls, building control visits, subbie coordination and client meetings. On a small job it's an hour. On an extension it's a day a week.
- Materials price rises between quote and order, on a fixed price.
- Cash. If you buy materials and pay subbies before the client pays you, you're financing their extension.
Worked example: an extension as quoted and as built
Here's a single-storey rear extension priced at £48,000 excluding VAT, planned at 10 weeks. The second half of the table shows what often happens on site.
A £48,000 extension, as quoted and as built
A two-person team plus subbies; true cost £262 a person per day including overheads.
| Price, excluding VAT | £48,000 |
| Own labour as quoted2 people × 50 days × £262 | £26,200 |
| Materials and subcontractors as quoted | £14,600 |
| Profit as quoted£48,000 − £40,800 | £7,200 |
| Overrun: one extra week2 people × 5 days × £262 | −£2,620 |
| Scaffold and skip for the extra week | −£350 |
| Unpriced extras: sockets, a moved door, upgraded tiles8 items, average £180 | −£1,440 |
| Owner's management time not in the price10 half-days × £131 | −£1,310 |
| Materials rises after the quote4% on £8,000 of materials | −£320 |
| Profit as built£7,200 − £6,040 | £1,160 |
The extension took 55 days of a two-person team and earned £1,160, about £21 a day for the firm. A £3,000 bathroom priced at the same rate and finished on time would earn more per day. The renovation builder above was busy the whole time and still told us: "I nearly went bust a few times."
Your numbers, not a promise. Change any figure to match your firm.
Put your own last big job into the calculator. The defaults are the job as built: labour is 110 man-days at £262 plus the £1,310 of management time, materials include the £320 rise, and the overhead line holds the extra scaffold and the free extras. The profit comes out at the same £1,160.
How do you protect margin on a big job?
Price the risks you know about, write down every change, charge for your time and get paid as you go. None of these is complicated. They fail because there's no time to do them on site.
Write every variation down before you do it
The single biggest fix. When the client asks for a change, price it, send it in writing and get a yes before the work. A WhatsApp message counts if it says what, how much and "agreed". The renovation builder told us his problem was memory: "By the time I sit down to write it down, it's gone." Record it on the spot, by voice note if that's what you'll use. Pricing variations has wording and a method.
Charge for your management time
If you spend a day a week running the job, that's a day you're not earning on the tools. Either build it into your overheads per man-day or show it as a fee. Some builders charge a project management fee as a percentage of the build cost; the project management fee guide shows how to set one.
Stage the payments
Tie payments to stages you can see: deposit, foundations, wall plate, roof on, first fix, completion. Each payment should land before you spend the next stage's money. Deposits and stage payments covers the amounts and the consumer law, and one-click acceptance and deposits covers getting the first one paid quickly.
Should you stop taking big domestic jobs?
Not necessarily. Big jobs fill the diary, keep a team together and lead to referrals. The fix is to price and run them like the risk they are. If after a few jobs your figures still show less profit per day than smaller work, raise the price of big jobs or chase more of the smaller ones. You can only make that call if you cost each job when it finishes. Job costing for trades shows how.
Where Nexley fits
Nexley is the AI back office for UK trade firms: five AI assistants run your tenders, quotes, buying, scheduling and invoicing. It connects to the tools you already work in, you run it all from WhatsApp, and you approve everything. £799 a month.
For bigger jobs, Nexley prices the quote from your rates, prelims and margin, records variations from a voice note on site and drafts the change for the client to approve, and matches supplier bills to the job as they arrive. You see the job's profit as it runs on WhatsApp, and approve anything before it goes out.
Common questions
What margin should a builder make on an extension?
There's no official figure. Work out the margin you need from your overheads and the risk on the job, then check it holds after costing the finished job. The example above uses 15% as quoted.
Why do I win big jobs but have no money?
Often because cash goes out before it comes in, and because overruns and free extras eat the profit. Stage payments and written variations fix most of it. See busy but broke.
Should I charge more per day on big jobs?
Charge for the extra risk and management, either through contingency and a management line or a higher rate. Pricing a big job at the same day rate as a small one, with no allowance for either, is how the margin disappears.
Sources
- Citizens Advice: Problems with the cost of building work
- GOV.UK: Building materials and components statistics, July 2026 commentary
- GOV.UK: Rates and thresholds for employers 2026 to 2027
Every rule, rate and date above was checked against these sources on the date shown at the top.
Topic: Pricing and quoting
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