CLEANING BID GUIDE / PRICING MATH
Margin and markup give you different prices.
If a job costs $1,000, adding 25% creates a $1,250 price and a 20% margin. A 25% margin needs a price of about $1,333.33. The difference comes from what you divide by.
1. The denominator changes the answer
Both percentages describe the gap between your price and cost. Markup compares that gap with cost. Margin compares it with the selling price.
Markup = (price − cost) ÷ cost × 100
Margin = (price − cost) ÷ price × 100
For a bid, decide what costs you are measuring before using either percentage. SweepBid's target margin uses its modeled total cost: loaded labor, supplies, other direct costs, and an overhead allocation. The result is an estimated operating margin before income tax and any omitted costs.
2. Compare two prices on the same $1,000 cost
Assume the monthly service costs your business $1,000 after all costs included in your model. These are illustrative numbers to explain the math, not a suggested margin or a cleaning price benchmark.
With a 25% markup
Price = $1,000 × 1.25 = $1,250
Modeled profit = $1,250 − $1,000 = $250
Margin = $250 ÷ $1,250 × 100 = 20%
With a 25% margin
Price = $1,000 ÷ (1 − 0.25) = $1,333.333…
Rounded price = $1,333.33
Modeled profit = $1,333.33 − $1,000 = $333.33
The rounded price produces almost exactly a 25% margin. It is $83.33 higher than the price made with a 25% markup.
A quick check: For positive costs and profit, the markup percentage is larger than the margin percentage. A $250 profit is a bigger share of a $1,000 cost than of a $1,250 price.
3. Convert between the percentages
Use decimal values in these formulas: 25% becomes 0.25.
Markup decimal = margin decimal ÷ (1 − margin decimal)
Margin decimal = markup decimal ÷ (1 + markup decimal)
| Target margin | Equivalent markup | Price | Modeled profit |
|---|---|---|---|
| 10% | 11.11% | $1,111.11 | $111.11 |
| 20% | 25.00% | $1,250.00 | $250.00 |
| 25% | 33.33% | $1,333.33 | $333.33 |
| 30% | 42.86% | $1,428.57 | $428.57 |
| 40% | 66.67% | $1,666.67 | $666.67 |
The table rounds percentages and prices for display. It does not recommend one target for your business. The right decision needs your own cost records, capacity, scope, and commercial judgment.
4. A correct formula still needs complete costs
Suppose you price the $1,000 model at $1,333.33, but later find $100 of monthly costs that were missing. Your profit becomes $233.33, and the margin becomes about 17.5%.
Revised margin = ($1,333.33 − $1,100) ÷ $1,333.33 × 100 ≈ 17.5%
Review these inputs before relying on the displayed margin:
- Labor hours: include person-hours for the work, setup, restocking, and paid travel.
- Loaded labor cost: account for the base wage and your actual employer costs.
- Supplies and other direct costs: include items you will provide for this job.
- Overhead: allocate the business costs you intend this job to cover, without counting an expense twice.
Keep the scope and cost model together. If a client adds work, calculate its cost before deciding whether the existing price still works.
5. Enter a margin in SweepBid
The calculator's Target operating margin field is a margin percentage. Entering 25 tells it to divide cost by 0.75.
Price before sales tax = max(modeled cost ÷ (1 − margin decimal), minimum monthly price)
If you set a minimum price above the calculated price, the actual modeled margin will be higher than the target. Review the displayed result after setting a minimum.
The calculator applies any entered sales-tax rate after the base price calculation. The operating-margin calculation uses the price before that tax. Your tax input is something you must determine for the specific service and location.
Can I enter a markup instead?
Convert it first. A 25% markup corresponds to a 20% margin, so enter 20 in the margin field if that is the pricing approach you want to model.
Does the displayed profit equal what I take home?
No. It is the proposed service price less the expenses represented in this estimate. Unmodeled costs, actual workload changes, and income tax can change the amount available to you.
Keep building your bid
Put your own site into the numbers.
Enter the workload, costs, and scope you can support. SweepBid shows the monthly calculation as you go.