I wouldn’t start by deciding what percentage goes into each bucket.
I’d start with your actual numbers.
For that $500 job, I’d want to know:
Once those are covered, you can see what gross profit is left to pay for overhead, owner pay, taxes, reserves, and profit.
The biggest mistake I made early on was looking at the money that hit the bank and mentally treating too much of it as available cash.
It wasn’t.
A lot of that money already had a job.
I’d also figure out your monthly overhead separately: software, insurance, vehicles, office/admin, marketing, phones, rent, bookkeeping, etc. Then divide that across the amount of work you realistically produce.
For reserves, I’d build them intentionally rather than just saving whatever happens to be left over. Vehicle repairs, equipment replacement, slow months, and payroll emergencies will happen eventually.
Once you know your true cost per job and monthly overhead, deciding how much can go toward profit or reserves gets a lot easier.
I’d be careful copying someone else’s percentages because a labor-heavy service business and a material-heavy trade can have completely different numbers.
