Contents
The calculation everyone doesWhat's missingThe full exampleWhat it changesMeasure, don't estimateThe calculation everyone does
Selling price minus material cost. It's quick, it's wrong, and it's why companies full of work go under.
What's missing
- Your labour — your hours aren't free
- Travel: round trip times days on site
- Equipment hire, the platform, the skip
- Subcontracting
- Company overheads, pro-rated to the job
- Hours spent pricing and following up
The full example
€12,000 quoted. €3,000 of materials. 12 days for two, i.e. 168 hours at €45 = €7,560. 40 km round trip × 12 days × €0.45/km = €216. A platform at €600. Left: €624. For twelve days of work. The job wasn't profitable, it was just big.
What it changes
Nothing, if you find out afterwards. Everything, if you know beforehand: you adjust your price, decline, or accept knowingly because the client will bring others.
Measure, don't estimate
The only way to get accurate figures is to record as you go: materials with their cost, hours actually spent, kilometres. Five seconds per line, on site, beats a reconstruction at month end.
Nexap works all this out for you, job by job.
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