Price a commercial bid you can actually deliver on

Start with the scope, not the price

Before any number goes on paper, write down exactly what you are bidding: the work included, the work excluded, the site conditions you are assuming, and how change orders will be priced. A bid that is vague about scope is really a guess about price. If the request for proposal or the walk-through leaves something unclear, ask before you bid it — not after you win it.

Build your direct cost stack first

Estimate labor as hours, not dollars, then multiply by your loaded hourly cost — wages plus payroll taxes, workers' compensation, and benefits, not just the wage you pay. Add materials, equipment, rentals, permits, and any subcontractor quotes. This total is your direct cost, and it should hold up if someone asks you to show your work.

Add overhead before you add margin

Overhead is what it costs to run your business whether or not this particular job exists: office, insurance, vehicles, salaried staff, software. Spread a fair share of it across your expected annual revenue and add that to the job before you decide what you want to earn. Skipping this step is the most common reason a job that looked profitable on the bid still leaves the business short at year end.

Choose a margin and a contingency you can explain

Gross margin is what is left after direct costs; what you actually keep, after overhead, is closer to what matters. Add a contingency for real risk in the job — unfamiliar site conditions, a tight schedule, a scope you had to estimate without full plans — not as a hidden markup, but as a number you could explain to the buyer if they asked.

Write it so the buyer can say yes

State the scope, the price, what is and is not included, your schedule, and your payment terms in plain language. A proposal that reads clearly and answers the buyer's obvious questions moves faster than one that is technically complete but hard to read.

Keep score after you win

Track actual hours and costs against what you bid. That comparison, not the win, is what makes your next bid more accurate. "Your first step toward commercial work" covers the relationships and workflow around this process; this guide is about the math inside the bid itself.

Every job's direct costs, overhead, and appropriate margin are specific to that business and that scope — figures used for teaching should never be copied into a real bid. This is independent training, not an estimate, a quote, or professional accounting or legal advice.