Busy is not the same as profitable

The three numbers

What a job is actually worth after materials, travel and the hours nobody bills for. How many hours a week go to work that earns nothing. And what your worst-paying job type actually contributes.

Most owners know their turnover and their bank balance and nothing in between, which is exactly the gap where a busy year turns into a poor one.

• —Contribution per job after materials and travel
• —Unbilled hours: quoting, driving, chasing, admin
• —Which job types you lose money on
• —How many jobs you turned down and why
• —Debtor days — how long you wait to be paid

Travel is the hidden killer

An hour each way for a two-hour job is a day gone for a fraction of what a local job earns, and it never appears as a loss on any invoice.

Businesses in dispersed counties — Mayo, Donegal, Tipperary — are especially exposed. Tightening the radius frequently raises profit while lowering turnover, which feels wrong and is right.

Small jobs are usually the problem

The half-hour call-out with a twenty-minute drive either side earns almost nothing once you count the whole block of time it occupies.

A minimum job value, or a call-out fee, fixes this in a week. Most businesses resist it and then find nothing bad happens.

Turnover is a vanity number

A business doing four hundred thousand at a poor margin is harder work and less rewarding than one doing two hundred and fifty at a good one.

If you are going to track one figure, track contribution per working day rather than turnover. It changes which jobs you chase.