How to Price Your Services for Profit, The 45% Profit Margin Formula for Small Business

Episode notes

Are your profit margins all over the place? One project gives you 50% profit, the next barely hits 20%. This inconsistency is not just frustrating, it creates major problems during tax season. When your profits are unpredictable, you cannot accurately calculate quarterly estimated taxes. You cannot plan for your tax bill. You end up scrambling every April wondering where the money went. In this Tax Season Saturday episode, Patricia Oholeguy shares a simple and powerful pricing strategy called the 45% Profit Formula. This approach helps small business owners stop guessing on estimates, price services correctly, and create consistent profit margins. Most entrepreneurs estimate based on gut feeling. They forget hidden costs, underestimate time, and ignore overhead. Then they get blindsided by tax bills because the profit was nothing like they expected. In this episode you will learn the four true cost components every estimate should include. First, materials and waste factors that can be tracked and documented. Second, labor costs and the payroll taxes that come with them. Third, overhead allocation using bookkeeping methods that hold up in real financial reporting.