How to Know Which Jobs Actually Make You Money

You're making money on some jobs and losing it on others

Most service business owners don't know which jobs are profitable until months later, if at all. You bid the job, do the work, get paid, and move on. But if you're not tracking hours and materials against what you charged, you're flying blind. Some jobs that looked good on paper are eating your profit.

The fix is simple: you need to see, for each job, what you spent versus what you made.

Start tracking three things on every job

You need actual numbers, not guesses.

• Hours worked. Write down when your crew started and stopped, every day. Count travel time if the job is far away. Add up the total hours.
• Materials and supplies used. Keep receipts or log what came out of inventory. If you used half a can of paint, count half the cost.
• What you charged. This is your invoice total.

Do this for ten jobs. You'll see patterns. Maybe residential jobs are solid but commercial bids are too low. Maybe jobs over an hour away eat your margin because of drive time. Maybe certain job types you thought were moneymakers are actually break-even.

Do the math after the job is done

After you finish and get paid, calculate profit per job.

Take your total charge. Subtract labor costs (total hours times your loaded labor rate—that includes wages, taxes, insurance, and vehicle). Subtract materials. Subtract any subcontractors. What's left is gross profit for that job.

If you charged 800 dollars, spent 300 in labor and 200 in materials, you made 300 dollars gross profit. That's 37 percent margin. That's healthy.

If you charged 1000 dollars and spent 600 in labor and 300 in materials, you made 100 dollars. That's 10 percent. That job barely paid for overhead. You'll starve doing those.

Use this to bid smarter next time

Once you know your real numbers, you know what to charge.

If you find out that jobs requiring two hours of travel time need to be 20 percent higher to be worth doing, bid them that way. If commercial jobs need longer lead times and more back-and-forth, and they're eating time, bid higher or stop taking them.

You can't fix what you don't measure. Spending five minutes per job to log hours and materials now means you'll know in six weeks which work is actually keeping the lights on and which work is just keeping you busy.

Keep it simple and consistent

You don't need fancy accounting software to start. A spreadsheet works. A notebook works. The point is doing it every single time, while the job is fresh in your mind.

Track three months of jobs this way. You'll see what pays. Then adjust your bids and your decisions on which work to take.

If you're already using software to manage your jobs, make sure it lets you log hours and costs against each one. You need that visibility built into your routine, not added as extra work. The easier it is to track, the more honest your numbers will be.