Anyone else realize they were breaking even or losing money after expenses?

It’s a painful but necessary realization. We call it "Margin Fade." You feel productive because the trucks are moving, but the bank account stays flat.

We've found it helpful to include an overhead allocation on the Job reports. It shifts the focus from "How much revenue can we hit?" to "How much are we keeping?" It's a useful exercise for any business to go through because you start to get a better grasp around what jobs are actually worth pursuing.

This is one of the most common traps in service businesses and it usually starts at the quote stage, not the job stage. By the time you're breaking down a completed job and finding the margin problem, the damage is already done.

The shift that tends to make the biggest difference is building your actual cost burden into the quoting formula before the job is ever sold. Not as a gut check after the fact, but as a hard floor the quote has to clear. Payroll burden, overhead allocation, transaction fees, all of it priced in by default.

The other piece is job mix. Once you have per-job margin visibility you start seeing which categories are consistently thin and which ones carry the business. A lot of operators find that 20% of their job types are generating most of the real profit and the rest is just keeping the trucks moving.

What did your pricing adjustment look like practically? Did you raise across the board or start being selective about job types?

I hired a Fractional CFO about two years ago.  I have been in business for 17 years and finally got to the phase of educating myself about finances.  We worked on a lot of strategies.  Now we evaluate our pricing every quarter and for the clients we need to raise we will.  Another big realization was what is the revenue amount we bring each month and if it is above a certain amount then our profit increases a lot.  I know these realizations might be normal for some but they were lightbulb moments for me. 

Yes — and it's a specific kind of painful because you can't see it coming. Everything feels productive until you actually break down where the hours went and what they cost.

The fix for us came in three stages:

1. Build a fully-loaded hourly cost — not just wage, but payroll burden, vehicle cost per hour, tool amortization, and overhead allocated per billable hour. That number is your floor. Every quote has to clear it before you've made anything.

2. Track job mix by margin, not revenue. Once you have per-job costing, you'll find fast that some job types are carrying the business and others are just keeping the trucks warm. Cutting or repricing the thin categories made a bigger impact than raising prices across the board.

3. Get real time data from the field. Estimated vs. actual hours is where most of the margin fade lives — jobs that quote at 2 hours and run 3.5. If your techs aren't capturing time accurately, your costing is based on guesses.

The quarterly pricing review Judith mentioned is smart too. Costs creep every year and most operators reprice reactively instead of proactively.

What job types were the worst offenders for you margin-wise?

All great insights! Thank you all!