One of the most common mistakes among professionals starting on their own is quoting only the direct cost of materials and hours, without including a margin that covers the rest of the business's expenses.
What the margin must cover, beyond profit
The margin is not just "extra gain": it must also cover indirect expenses such as the vehicle, tools, insurance, accountancy, time spent quoting and coordinating (which isn't directly billed time), and a cushion for the unforeseen events that inevitably arise on some project.
Indicative references by type of work
As a general reference for the construction and renovation sector in Spain, a margin of between 15% and 30% over direct cost is usual, higher on small or coordination-heavy projects (where management time weighs more) and lower on large projects with more material volume.
Why lowering the margin to "win the job" proves costly
Cutting the margin to offer the lowest price on the market may win the project in the short term, but leaves the professional unable to absorb unforeseen events or reinvest in their business. An insufficient margin sustained over time is one of the main reasons a self-employed person can't make ends meet despite having constant work.
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