Method · worked example
Before you start
The calculation
Harbour Plumbing & Heating is the fictional firm in our example report: owner on the tools, three engineers and one office coordinator. Figures are GBP excluding VAT.
Invoiced value excluding VAT, grouped by the type each job was booked as.
£148,400.00 − £22,000.00 − £0.00
1,750 of 5,050 job hours × £174,000 field payroll = £60,297.03
Spreading the whole field payroll over recorded job hours charges idle and unrecorded time to the work, as it should be. The calculator stops here.
£66,102.97 − £43,562.73
How that share is worked out moves the answer more than any other step. See below.
£22,540.24 ÷ 620 jobs; ÷ 1,750 hours
Worked comparison
| Job type | Jobs | Revenue | Profit | Profit per job | Profit per hour |
|---|---|---|---|---|---|
| Boiler replacements | 68 | £180,200 | £6,698 | £98.50 | £4.47 |
| Repairs & call-outs | 620 | £148,400 | £22,540 | £36.36 | £12.88 |
| Bathroom installations | 25 | £132,500 | £4,586 | £183.44 | £3.99 |
| Servicing | 430 | £68,900 | £19,676 | £45.76 | £30.27 |
Per job, the top earner is bathroom installations and the lowest is repairs & call-outs. Per engineer hour, the top earner is servicing and the lowest is bathroom installations. Neither ranking is wrong. If you have more engineer hours than work, the profit each job brings matters most. If the diary is full, what each hour earns matters most, because a long job uses hours another job could have had.
The assumption that reorders the ranking
The £92,800 of overheads is the same in every column below. Only the way it is shared between job types changes, and the ranking changes with it.
| Job type | Each cost by what drives it | Everything split equally per job | Everything split by job hours |
|---|---|---|---|
| Boiler replacements | £6,698 #3 | £15,996 #1 | -£6,048 #4 |
| Repairs & call-outs | £22,540 #1 | £15,765 #2 | £33,945 #1 |
| Bathroom installations | £4,586 #4 | £13,346 #3 | -£5,756 #3 |
| Servicing | £19,676 #2 | £8,392 #4 | £31,359 #2 |
Everything split equally per job: boiler replacements at the top, servicing at the bottom.Everything split by job hours: repairs & call-outs at the top, boiler replacements at the bottom, and boiler replacements and bathroom installations both show a loss.Sharing each cost by what drives it (the first column) is more work, and it is the only version you can defend line by line. Whichever rule you use, write it down and keep it the same from year to year.
What poor data changes
Return visits not recorded
Bathroom installations needed 7 return visits taking 69 hours. Leave those hours off and contribution per hour looks like £14.23 instead of £13.37.
Estimated hours
41 of 620 repairs & call-outs had their hours estimated rather than recorded. Keep them, but flag them, and say how many there were when you quote the result.
VAT and materials
Invoices including VAT against costs excluding it make every type look better, and the materials-heavy ones most. Materials bought for stock and never assigned to a job flatter whichever types used them.
Using the answer
Quoting. A type with a low profit per hour may be priced below what its hours cost. Check its hourly rate against your floor rate before anything else.
What to promote. Put your website, reviews and follow-up effort behind the type that earns most for the constraint you actually have, whether that is hours or demand.
What to test. Change one price or one rule for a quarter and run the same calculation again. The calculator does steps 1 to 3 for up to four types.
Or have it worked out from your own records.
£400 / $500 · up to 5 years of your jobs · 5 working days · refunded in full if nothing material is found
Up to five years of your jobs, grouped by type, with every overhead rule written down and a person checking the result.
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