Pricing, margin and profitability glossary
Concise definitions used throughout the calculators and guides.
| Price | The amount offered to the client for defined scope. |
|---|---|
| Direct cost | An expense attributable to a specific job. |
| Overhead | A business cost that cannot be assigned to one job. |
| Margin | Profit as a share of selling price. |
| Markup | Profit as a share of cost. |
| Break-even point | Sales level that covers fixed costs. |
| Effective rate | Revenue after direct costs divided by all job time. |
| Risk buffer | Reserve for uncertainty in scope, time or cost. |
| Retainer | Recurring fee for reserved availability and defined scope. |
| Scope | A precise definition of outcomes, limits and responsibilities. |