Did you make money on that job? The sum most of the trade gets wrong

There's a question every trader answers by feel, usually in the van on the way home: did that one make money?

The feel is unreliable in a specific and consistent direction. Big jobs feel profitable because big numbers move through them. Small jobs feel like they weren't worth getting the ladders out. Both of those are impressions of turnover, not profit, and they are wrong often enough to shape a whole year of pricing badly.

The sum most people do

Ask a trader what a job made and the answer is nearly always the same shape: what I invoiced, minus what the materials cost.

That figure is worth knowing. It is not profit. It is the pot the job has to pay you out of — and since it never has your own time taken off it, it can only come out negative if you spent more on materials than you charged. Which is to say: this sum tells you that almost every job you have ever done was profitable. That's not a finding. That's the sum being unable to produce any other answer.

Labour is usually the largest single cost in a trade job. Leave it out and you haven't measured the job, you've measured the materials.

What actually has to be in it

Four things, and only one of them is normally recorded anywhere.

Materials. The easy one. What went into the job, at what you paid, not what you charged for it.

Your own hours, at a rate that covers the business. Not what you'd like to earn an hour — the rate your year actually needs, which includes the van, the insurance, the scheme fees, the tools and the days you can't bill. Working that out backwards is its own exercise; on a worked example of £35,000 of pay and £12,100 of costs across 211 billable days it comes to £224 a day, or about £32 an hour on a seven-hour billable day. Use your own figure. Just make sure it's a real one and not the number your old employer charged for you.

Travel. Every visit, not just the working days — the quote visit, the second trip because the part was wrong, the drop-in to hand over the paperwork. Costing it at HMRC's mileage rate of 45p a mile is close enough and has the advantage of already being the number you use elsewhere.

The costs that get forgotten. Skip hire. Waste carrier charges. Parking, on a town job where it's £14 a day for a fortnight. Plant hire. Congestion or clean-air charges. These are individually small and collectively the difference between a job that worked and one that didn't, and they're forgotten because they don't arrive as a wholesaler invoice with the customer's name on it.

Then the arithmetic that matters:

(Invoiced − materials − travel − other costs) ÷ hours on the job = what those hours actually earned.

Hold that against the hourly rate your business needs. Above it, the job paid. Below it, the job was subsidised by your other work.

A worked example, because the ranking flips

Two jobs from the same month. Rate needed: £32 an hour.

The rewire. Invoiced £4,200. Materials £1,100. Eleven days on site at eight hours, plus about six hours of quoting, the two visits before it and a run to the wholesaler — 94 hours. Around 168 miles across all the visits, so £75.60 of travel. A skip: £220.

£4,200 − £1,100 − £75.60 − £220 = £2,804.40, across 94 hours. £29.83 an hour.

That's under the £32 the business needs. Costed properly — 94 hours at £32 is £3,008 of labour — the job comes out at a loss of about £204.

The fault-find. Invoiced £180. Materials £15. An hour and a half on site plus half an hour of getting there and writing it up — 2 hours. Nine miles, £4.05.

£180 − £15 − £4.05 = £160.95, across 2 hours. £80.48 an hour.

Costed the same way, that job made about £97 on a £180 invoice.

The rewire moved twenty-three times as much money and lost some of it. The fault-find felt like a favour and returned two and a half times the rate. Anyone judging by what's left after materials would rank those two jobs the wrong way round, decisively, and then go and quote the next rewire exactly the same.

The job profit calculator does this sum with your own numbers if you'd rather not do it on paper.

What this doesn't mean

It does not mean stop doing rewires.

A big job that comes in slightly under your rate is still hours filled, still cash through the account, and often still the right job to take — particularly against the alternative of an empty week, which earns nothing per hour at all. Whole-day work also carries less unbilled overhead per pound than a diary full of two-hour call-outs, and a rate is a yearly average rather than a test each job has to pass individually.

What it means is that you now know which jobs are carrying the others, which is the only basis on which to change anything. The useful responses are ordinary ones: price that kind of work higher next time, quote the skip and the parking as line items instead of absorbing them, cut the number of visits, or decide that particular job type is a loss-leader you take deliberately rather than one you take by accident.

The damage isn't in doing a job below your rate. It's in not knowing that you did, and then repeating it eleven times.

The one bit of arithmetic worth double-checking

Materials markup is where the maths quietly turns against people, because two different percentages get used interchangeably.

Markup is measured against what you paid. Margin is measured against what you charged.

Buy a board at £100, add 20%, charge £120. That's a 20% markup — but £20 on a £120 sale is a 16.7% margin. The two numbers diverge further the higher you go: a 50% markup is a 33% margin.

It matters because most people quote from markup and think in margin. If you have decided the business needs 25% on materials and you're adding 25% at the wholesaler's price, you're getting 20%. Over a year of materials that gap is real money, and it's invisible unless you go looking for it. The markup and margin calculator converts between the two if you'd rather not hold both in your head.

Doing it without it becoming a second job

Nobody is going to keep a costing sheet for every call-out, and they shouldn't.

The minimum that works is two habits. Photograph the receipt and put it against the job at the merchant's counter, while you're standing there — not into a folder, against the job, because a receipt with no job attached is just a tax record. And write down the hours on the day, roughly. Half-hour precision is fine. Reconstructing a fortnight from memory is not, because everyone rounds down the trips they'd rather not have made.

Then do the sum properly on maybe a dozen jobs a year: the ones that felt hard, the biggest one, and two or three of whatever work you get asked for most. You're looking for a pattern, not a ledger. The pattern usually shows up fast, and it's usually one job type or one kind of customer.

Where the software helps, and where it doesn't

Worth being straight about this, because the category oversells it.

grafter.ly holds the cost half: photograph a receipt against the job it belongs to, categorise it, and the job shows you what's been spent on it and what's left once you've invoiced. Costs never appear on anything the customer sees. Overheads that don't belong to a job — the van service, the insurance — go in without one, so they're recorded without polluting a job's figures.

What it does not do is track your hours. There's no timer, and the labour half of the sum above is still yours to supply. That's the biggest single number in most jobs, so it means the app can tell you what a job cost in money but not what it cost in you. Anything claiming to give you true job profitability without knowing how long you were there is telling you what's left after materials with a better chart on it.

Given the choice, record the hours even if you record nothing else. Materials you can reconstruct from receipts in January. Time is gone the moment you stop thinking about it.

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If the rate you're measuring against is the bit you're unsure of, what should I charge as a day rate works it out from what your year needs — and quoting so you get paid covers getting those costs onto the quote in the first place.