Was That Job Actually Profitable?
Enter what a job sold for and what it really took: materials, labor hours, subs, and its share of overhead. You’ll see the true profit and margin, and the price you’d need to hit your target next time. Nothing is stored or sent.
Net profit after overhead
Net margin / gross margin
Markup on direct costs
Price needed for your target
Find which jobs make money →
Direct costs = materials + (labor hours × labor cost per hour) + subcontractors and other direct costs. Gross profit = price − direct costs. Net profit = gross profit − overhead per job. Margins divide by the price; markup divides gross profit by direct costs. Price needed = (direct costs + overhead) ÷ (1 − target margin).
What's the difference between markup and margin?
Markup is profit as a share of your cost; margin is profit as a share of the price. A job that costs $1,000 and sells for $1,500 has a 50% markup but a 33% margin. Pricing with markup when you meant margin is one of the most common reasons jobs look profitable and aren't.
How do I figure overhead per job?
Add up a year of costs that aren't tied to one job, like rent, trucks, insurance, office staff, software and your own salary, then divide by the number of jobs you complete in a year. Use last year's numbers if you have them.
Why include my own labor?
If you work on the job, your hours cost the business something even if you don't pay yourself by the hour. Leaving them out makes jobs look more profitable than they are and hides which jobs to stop taking.
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