Most trade and service businesses do several kinds of work: big installations, small repairs, maintenance contracts, emergency call-outs. Some of that work makes good money and some barely covers its costs, but without comparing jobs on the same basis it is hard to tell which is which. Turnover hides it, because a busy diary feels profitable.
This guide compares jobs on true profit: what is left after materials, labour and a fair share of overheads.
Overheads such as rent, vans, insurance, software and office staff have to be paid from the profit on jobs. The simplest fair way to share them is by the hour:
Overhead rate per hour = yearly overheads ÷ productive hours per year
If overheads are £54,000 and the team works 3,000 productive hours a year on jobs, each hour on a job must carry £18 of overhead. A job that takes 10 hours carries £180, whatever its price.
A heating firm with a labour cost of £22 an hour and an overhead rate of £18 an hour compares four recent jobs:
| Job | Price | Hours | Materials | Profit | Margin |
|---|---|---|---|---|---|
| Bathroom refit | £6,500 | 80 | £2,600 | £700 | 10.8% |
| Boiler swap | £2,800 | 14 | £1,500 | £740 | 26.4% |
| Small repair | £120 | 2.5 | £15 | £5 | 4.2% |
| Annual service | £95 | 1.5 | £10 | £25 | 26.3% |
Profit is the price minus materials, minus hours × £40. The bathroom refit has the biggest price but earns £700 for 80 hours of work: under £9 an hour. The boiler swap earns more in 14 hours, about £53 an hour. Small repairs barely break even once travel time is included in the hours.
Include all the hours each job took: travel, quoting, collecting materials and any return visits.
Margin and profit per hour can disagree. A high-margin job that takes the whole team a week may earn less per hour than a lower-margin job done in a day. When capacity is your constraint, profit per hour is the better guide.
The true cost per job guide explains each hidden cost in detail, and the utilisation guide shows how many hours you can actually sell.
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