Finishing Works Pricing: How to Price a Fit-Out Project and Know Your Profit
Fit-out pricing determines whether a project will generate real profit or create cash-flow pressure during execution. Many finishing and interior-design companies do not lose money because of poor workmanship; they lose because items are underpriced, overhead is omitted, or changes are delivered without approval. This guide explains a practical way to price a fit-out project and calculate profit before signing the contract.
Fit-out pricing in brief
Selling price = direct cost + overhead + risk contingency + target profit. The calculation must begin with an accurate quantity take-off and itemized scope, not a rough square-meter rate alone.
What does pricing a fit-out project mean?
Quantity take-off is the process of extracting the quantities of work from drawings and the site. A Bill of Quantities (BOQ) is the structured document that lists items, units, and quantities; unit rates can then be added to create a priced BOQ. A missing quantity or incorrect unit directly affects the final price.
Why does incorrect pricing cause losses?
• Missing an item or part of its quantity.
• Using outdated material prices or excluding transport and waste.
• Underestimating labor or subcontractor cost.
• Omitting project management, site, transport, and general overhead.
• Delivering client changes without written pricing and approval.
• Confusing profit margin with markup on cost.
The correct steps for pricing a fit-out project
1. Define the scope and quantities
Start with clear drawings and a site survey. Create a separate item for every activity with its unit, quantity, specification, assumptions, and exclusions.
2. Calculate material cost
Multiply each quantity by the current purchase rate, then add transport, handling, storage, and an appropriate waste allowance. Waste varies by material and installation method.
3. Calculate labor and subcontractors
Enter the actual execution cost for each item, whether it is daily labor, a lump-sum subcontract, or a unit rate. Include equipment, testing, or specialist supervision linked to that item.
4. Add overhead
Include project management, supervision, office costs, transport, communications, utilities, security, and other indirect expenses. Some companies use an illustrative range such as 8%–15%, but there is no universal rate; use your own historical data and the project's duration, location, and complexity.
5. Add risk contingency
Assess price volatility, site constraints, design uncertainty, and project duration. The contingency should reflect the specific project rather than an automatic fixed percentage.
6. Set the profit and selling price
After calculating full cost, choose the target profit based on risk, working capital, competition, and your company's experience. Ranges such as 15%–30% may appear as market examples, but they are not a rule or a guarantee.
Profit margin versus markup
Markup = profit ÷ cost. Profit margin = profit ÷ selling price. They are not the same number.
If cost is EGP 100,000 and you add a 20% markup, the selling price is EGP 120,000, but the actual margin is only 16.67%. To achieve a true 20% margin, selling price = 100,000 ÷ (1 - 0.20) = EGP 125,000.
Worked fit-out pricing example
• Materials: EGP 80,000.
• Labor and subcontractors: EGP 50,000.
• Direct cost: EGP 130,000.
• Illustrative overhead at 10%: EGP 13,000.
• Full cost: EGP 143,000.
• For a target margin of 20%: selling price = 143,000 ÷ 0.80 = EGP 178,750.
• Expected profit before tax and unapproved changes: EGP 35,750.
This example is illustrative. Adjust every allowance using your company's data and contract terms, including VAT, contingency, and variation orders where applicable.
Common fit-out pricing mistakes
• Pricing the whole project with one square-meter rate despite different specification levels.
• Copying an old BOQ without updating rates or specifications.
• Treating a client payment as profit before deducting costs and commitments.
• Failing to separate the cost of each project and item.
• Executing additional work without a priced, approved variation order.
How to track profitability after pricing
Good pricing is only the starting point. During execution, compare actual and budgeted cost for every item, and record subcontractor claims, client payments, and variation orders immediately. Bonyan ERP connects the BOQ, expenses, subcontractors, collections, and project-profitability reports instead of relying on disconnected files.
Related resources:
https://bonyan-erp.com/en/items-boq
https://bonyan-erp.com/en/cost-profitability
https://bonyan-erp.com/en/profit-leak-calculator
https://bonyan-erp.com/en/blog/erp-system-for-fit-out-interior-design-companies
Conclusion
The right price does not begin with a competitor's number or a memorized square-meter rate. It begins with a clear scope, accurate quantities, and current costs, followed by overhead, risk, and profit calculated correctly. After signing, continuous actual-cost tracking protects the profit you planned.
Try Bonyan ERP free for 14 days to manage fit-out and interior-design projects, cost, and profitability in one place:
Frequently Asked Questions
How do I calculate the finishing price per square meter?+
A square-meter rate is only a preliminary estimate. Accurate pricing starts with itemized quantities, then materials, labor, overhead, contingency, and correctly calculated profit.
What is a suitable profit margin in fit-out work?+
There is no single suitable rate for every project. It depends on scope, risk, cash flow, and competition. Profit margin is profit divided by selling price; markup is profit divided by cost.
What is the difference between quantity take-off, a BOQ, and a priced BOQ?+
Quantity take-off is the process of extracting quantities from drawings and the site. A BOQ is the structured list of items, units, and quantities; adding unit rates creates a priced BOQ.
Why do some fit-out companies lose money despite having lots of work?+
Usually because of incorrect pricing and poor actual-cost tracking during execution, allowing uncosted items and free changes to consume the project profit.
Can fit-out projects be priced in Excel?+
Excel can work initially, but multiple projects make it difficult to connect BOQs with actual cost, collections, subcontractors, and profitability. Bonyan ERP manages them in one place.