304 - Job Profitability

I taught this workshop in my recent client Intensive - how to measure job profitability. It’s part of my program - they paid to get it. You’re getting it here for free.Most people don’t measure job profitability. It feels like an admin burden that gets in the way of doing work you get paid for, it’s hard to do well (or, at least, it takes effort and attention) so people put it to one side and focus on other things.I understand that - you have lots of demands on your time and this has to compete with them.It’s also probably costing you a lot of money. You quote a job, win it and someone in your business does it. When you quote it, you quote it with a margin in mind - say 30% gross margin.There are many ways that margin can be eaten away between the quote and the finish. You can estimate it wrong, get your costs wrong, give a discount. Your team can take too long, use too much stuff, make mistakes that need correcting; you can fail to charge for variations, get the scope wrong and not get paid for the whole thing …..and on we go.I’m sure you’re aware of the ways things can go wrong - nobody ever listens to me say this stuff and says “that never happens, Jon”.The point is that you need to know which of these is happening in your business so you can stop it happening and stop that money (profit) leaking out of your business.Which brings me back to measuring profitability on jobs.If you do a quote and win the job and do the work and invoice it and move on to the next thing, you leave this to chance. You might have made money on it and you might not have. You don’t know.You might be doing the same thing on every job - or your business might be suffering from the same issue on every job.You won’t necessarily know until your accountant says “No tax bill this year - you didn’t make any profit”There’s a solution. Of course there is. It involves doing the boring and difficult job of setting up systems to measure the inputs into your job costings - labour and materials and all the other things you include in your quote - so you measure them and calculate the gross profit you make - and compare it to what you hoped to make when you quoted.If it’s less, you can go and find out why.If you compare multiple jobs and see you make the same mistake over and over - you can fix that problem and you’ll make a big difference to your bottom line.You really should do this.The reason I have a business (as a business coach) is that nobody wants to do this stuff. It’s boring, it feels like not real work, when you should be on the tools or doing something else important.But it’s part of building the systems and structure that will give you a proper, profitable business and if you work with me, I’ll be persistent about the need to do it so you make more money.So do it or talk to me about getting coached so I can push you to do it.--------------------------------------Get the JOB PROFITABILITY ANALYSIS for Trades and Builders here: https://pages.smallfish.com.au/job-profitability-analysis-dlIf you want more money (profit), more time (off work), and more freedom (from work, stress, responsibility) Book a Money Call: smallfish.com.au/tradies/money-call/FOLLOW US AT:Facebook: https://www.facebook.com/smallfishcoach/Twitter: https://twitter.com/smallfishcoachInstagram: https://www.instagram.com/smallfishbusinesscoach/YouTube channel: https://www.youtube.com/c/smallfishau