The Jobs That Quietly Bankrupt You
A landscaping company looked at their books at the end of the year. Revenue: $680,000. Profit: $41,000. A 6% margin on $680K in backbreaking work. Something was wrong.
When they dug into the numbers job by job, the answer was clear: about 30% of their jobs were actually losing money. Small residential cleanups under $500 that took longer than estimated. Jobs for difficult customers who demanded extras. Rush jobs where they pulled crews off profitable work to squeeze in a favor.
They weren't just doing unprofitable work -- they were subsidizing it with their good jobs.
Why You Don't Know Which Jobs Lose Money
Most contractors track total revenue and total expenses. Maybe they know their overall margin. But almost nobody tracks profit per job type.
You know your total fuel costs for the month. But do you know the fuel cost for the $800 tree trim versus the $6,000 lot clearing? You know your total labor for the week. But do you know the effective hourly rate you earned on Monday's job versus Thursday's?
Without per-job tracking, your profitable jobs are quietly funding your unprofitable ones, and you have no idea which is which.
How to Find the Losers
Export your completed jobs for the last 6 months. Pull from your CRM or accounting software: job type, revenue, time spent (travel + work + admin), materials, and any subcontractor costs.
Calculate the effective hourly rate for each job. Formula: (Revenue - Materials - Subs) / Total Hours = Effective Hourly Rate. If your target is $150/hour and a job came in at $65/hour, that's a problem.
Flag the patterns. You'll find them fast. Maybe every job under $1,000 loses money because your fixed costs (drive time, setup, admin) eat the margin. Maybe commercial jobs have great revenue but terrible margins because you underbid. Maybe one zip code always takes 45 minutes to reach and kills your per-hour rate.
A concrete contractor did this exercise and found that small patio pours under 200 sq ft were his worst performers. The setup time was the same as a large pour, but the revenue was a quarter of the size. He set a $3,500 minimum and stopped doing small work. His average job profit jumped 34%.
What to Do With the Losers
Raise the price. Some unprofitable jobs become profitable at a higher price point. If small fence repairs are losing money at $400, try $650. You'll lose some of those jobs -- that's fine, they were costing you money anyway. The ones that stick are now profitable.
Set a minimum. If your break-even requires $800 per job just to cover travel, setup, and overhead, stop taking jobs under $800. Tell leads upfront: "Our minimum project size is $800." It hurts to turn away work, but unprofitable work isn't really work -- it's charity.
Batch similar jobs. If small jobs lose money individually but you can stack three in the same neighborhood on the same day, the combined efficiency might make them worthwhile. But track it to be sure.
Fire the customer type. Some customer profiles are consistently unprofitable. The negotiators who beat you down on price. The ones who demand extra work mid-project. The ones in zip codes that are too far from your base. Stop marketing to them.
The 80/20 Rule Is Real
In almost every home service business, roughly 20% of job types generate 80% of the profit. Find that 20%, double down on marketing for those jobs, and either raise prices on or eliminate the bottom 30% that's dragging you down.
Bottom Line
You can't fix what you don't measure. Track profit per job, find the losers, and stop doing them. The fastest way to make more money isn't getting more work -- it's stopping the work that costs you money.