How to price for a target gross margin

Gross margin measures the share of selling price remaining after the costs you include in the calculation. It is different from markup, which compares gross profit to cost. To price a mowing visit, you must account for wages, equipment, fuel, and any allocated overhead you want the job to recover.

The formula

Selling price = total cost ÷ (1 − desired gross margin). Express margin as a decimal: 30% is 0.30. Gross profit equals selling price minus entered cost. Markup equals gross profit divided by entered cost.

Pricing example

Suppose labor is $50, equipment supplies cost $12, travel costs $8, and the allocated overhead is $10. Total cost is $80. To achieve a 30% gross margin, divide $80 by 0.70 to get $114.29. Gross profit is $34.29 and markup on cost is about 42.86%.

Should I use margin or markup?

Either can support pricing decisions if used consistently, but confusing them causes underpricing. This calculator targets margin; it does not recommend a margin for your region. Review whether the price makes sense based on the service scope and local demand.

For a full mowing price including lawn size and crew time, open the lawn mowing quote calculator.