How do I know which jobs actually make me money?
Compare each job’s price against everything it really cost: materials, every hour of labour including yours, travel, and a share of overhead. Most owners know the price and the materials and guess the rest. The jobs that look best by revenue are often not the ones that make the most per hour.
Track the hours, all of them
Labour is usually the cost that hides. Quoting, driving, call-backs, the second trip for the missing part, your own evenings on paperwork. If hours are not tracked per job, profit per job is a guess.
Put overhead on every job
Insurance, vehicles, the office, software, your own wage. Divide a month of overhead by the hours worked in that month, and you have a cost per hour to add to every job. Without it, a job can look profitable while the business loses money.
Look at profit per hour, not per job
A large job can make less per hour than a small one. Comparing what each kind of job leaves per hour of your team’s time shows you which work to chase and which to price up or turn down.
Check after, not just before
An estimate is a prediction. Comparing it with what the job actually took, even roughly, for a few jobs a month, is how quoting gets better and how you find the kinds of work that always run over.
Also asked
- Do I need special software?
- Not to start. Hours, materials and the price for each job in a spreadsheet will show you most of it. Software helps once the volume makes a spreadsheet painful.
- What profit margin should I aim for?
- It varies widely by industry. Know your own number first; then compare it with others in your trade, carefully.
- What do I do with jobs that lose money?
- Raise the price for that kind of work, change how it is done, or stop offering it. Keeping it because it is familiar is the expensive choice.
Related
Written for your trade
This is the kind of thing Solomon works through with owners using their own numbers. See how it works →