17/07/2026
For about nine years I priced against other plumbers.
I would hear what someone else charged, land just below it, and call that my rate. Felt smart. Felt competitive.
What I never did was add up what my own business actually cost per month.
The workshop I rented but barely used. The bookkeeper I needed but resented paying. The phone and data plan. The cordless drill that vanished on a job in Randburg. The insurance I renewed every year without reading. The small stuff that does not feel like cost until you add it all up.
When I finally did add it up, I was sitting on about R 28 000 a month in overhead before I paid a single wage or bought a litre of diesel.
I was billing roughly 120 hours a month.
That is R 233 of pure overhead sitting in every hour I sent to a client. Not profit. Not labour. Just the cost of the business existing.
And I had not put it anywhere near my rate.
So where was it going? Out of whatever was left at month end. Some months there was enough. Some months there was not. I told myself it was a slow month. It was not a slow month. It was a rate that did not cover what it needed to cover.
When I built the formula that eventually became PlumbTrack, the first thing it asked was total monthly overhead. Not turnover. Not what the other guys charge. Just: what does it cost you to open the doors this month?
Divide that by your real billable hours and you have a floor. You cannot price below it without losing money, no matter how busy you are.
For my business, that floor works out to R 1 380 an hour. That is not a target. That is the number where I stop going backwards.
If you do not know yours, the formula will work it out for you in about ten minutes.
It is called the Golden Ratio Formula. Free at plumbtrack.co.za.