Know your numbers: the handful that actually matter
You don't need an accounting degree. You need five numbers — and most contractors can't name three of them. Here they are.
Plenty of busy contractors are quietly going broke because they've never looked at the few numbers that tell them whether the work is actually making money. You don't need spreadsheets and a CFO - you need to know a small handful of figures and check them regularly. Here's the short list that keeps a trades business healthy.
Busy is not the same as profitable
The most dangerous place to be is slammed and broke - working nonstop while the bank account never grows. It happens because 'busy' feels like success, so nobody checks whether the jobs actually make money. The numbers below are how you tell the difference.
The five numbers
- Revenue - what's coming in. The one everyone knows, and the least useful alone.
- True job cost - labor (including your time), materials, and a share of overhead. What a job really costs you.
- Profit margin - what's left after all costs. The number that actually matters.
- Customer acquisition cost - what you spend in marketing to land one job.
- Repeat & referral rate - how much work comes from past customers. Cheap, warm, high-margin growth.
How to actually keep up with them
You don't need fancy software to start - a simple monthly review of these five will put you ahead of most of your competition. Look for the trends: margin slipping, acquisition cost creeping up, repeat rate stalling. Each one points to a specific fix.
“I thought I was killing it because I was always busy. I ran the margins and realized two of my service types lost money. Cutting them was the best decision I made.”
See how you score on this.
Your Blueprint scans your real Google presence in 60 seconds and shows the exact fixes worth the most — no card, no call.
Scan my businessTrack revenue, true job cost, profit margin, cost to get a customer, and repeat rate. Five numbers, checked monthly, tell you whether you're building a business or just buying yourself a hard job.
Common questions
Just profit margin per job. Take a month of jobs, subtract true costs from revenue, and see what's really left. It's the single most eye-opening number.
Monthly is plenty to catch trends without obsessing. A quick quarterly deep-dive helps you spot the bigger patterns.
Eventually, yes - especially for taxes and growth. But you should understand these five numbers yourself; they're too important to fully outsource.