Profit & Cash Flow
10 min
By
Stuart Trier

SAMPLE - 7 Reasons Your Profit Isn't Growing

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Reason 1 of 7

Margin is measured company-wide, not job by job

What it costs: Sample: a few losing jobs hide inside a healthy-looking average.

How to spot it

Sample text. The monthly report shows one gross margin figure, and nobody can name the least profitable job from last quarter.

What to do

  1. Report gross margin per job for the last 60 days.
  2. Rank the jobs and review the bottom five with the crew lead.
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Reason 2 of 7

Overhead grows faster than revenue

What it costs: Sample: each new hire and subscription eats the growth it was meant to support.

How to spot it

Sample text. Revenue is up, and profit is flat or down.

What to do

  1. Compare overhead as a percent of revenue across the last four quarters.
  2. Freeze new fixed costs until the ratio stops rising.

Reason 3 of 7

Change orders go unbilled

What it costs: Sample: extra work delivered on a handshake and never invoiced.

How to spot it

Sample text. Final invoices match the original quote almost to the dollar, even on jobs that grew.

What to do

  1. Require a signed change order before any added work starts.
  2. Audit five closed jobs for work that was never billed.

Reason 4 of 7

Payroll is not tied to production

What it costs: Sample: labor hours climb while billed hours stay flat.

How to spot it

Sample text. Nobody compares hours paid to hours billed.

What to do

  1. Track billed hours against paid hours per crew each week.
  2. Investigate any crew below your target ratio.

Reason 5 of 7

Owner pay is buried in overhead

What it costs: Sample: profit looks better than it is because the owner works for free.

How to spot it

Sample text. The owner draws whatever is left, so the P&L never shows what a replacement would cost.

What to do

  1. Put a market salary for your role on the P&L.
  2. Read profit again after that line.

Reason 6 of 7

Invoices go out late

What it costs: Sample: cash arrives weeks after the work is done, so growth needs a credit line.

How to spot it

Sample text. Completed jobs sit in a folder until the office has time to bill them.

What to do

  1. Invoice on the day of completion.
  2. Review the list of completed but unbilled jobs every Monday.

Reason 7 of 7

Callbacks and rework are not tracked

What it costs: Sample: free return visits quietly erase the margin on the original job.

How to spot it

Sample text. Warranty visits are logged as normal service calls, with no cost tied back to the first job.

What to do

  1. Tag every callback and charge its cost to the original job.
  2. Review callbacks by technician once a month.

Score yourself

Answer each question yes or no. Count your yes answers.

  1. Do you see gross margin for each job?
  2. Is overhead as a percent of revenue flat or falling?
  3. Does every added scope item get a signed change order?
  4. Do you compare paid hours to billed hours?
  5. Does the P&L include a market salary for the owner?
  6. Are jobs invoiced the day they finish?
  7. Do you track the cost of callbacks?

6 or 7 yes: Sample band text for a healthy result.

3 to 5 yes: Sample band text for a mixed result.

0 to 2 yes: Sample band text for a serious result. Take the free diagnostic.

Start here

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Frequently asked questions

1. Why is my revenue growing but my profit is not?

Sample answer. The usual causes are margin loss on individual jobs and overhead that grows faster than sales.

2. What is the difference between profit and cash flow?

Sample answer. Profit is what is left after costs on paper, and cash flow is when the money actually arrives.

3. Where should I start?

Sample answer. Start with job-level margin, because it shows which of the other six reasons is hitting you.

Stuart Trier

Clear Results

Stuart Trier is the Founder and CEO of Clear Results. Over the past 20 years, Stuart has built, bought, and sold 11 companies across the home service, healthcare, and marketing industries. He built his first company from startup to $8M in revenue in 3 years before a successful exit, then built a chain of 28 healthcare clinics and sold the business to a publicly traded company. Following that acquisition, Stuart spent 3 years working alongside the CEO, helping lead the organization through a take-private transaction before participating in a nine-figure exit to a Fortune 10 company. Today, he's the lead investor behind an electrical services platform operating across 3 U.S. states, and has worked directly with owners through 1,800+ strategic advisory sessions.

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