|---|---| | Contract price | $32,000 | $4,800 | | Materials + labor + subs | $21,500 | $1,900 | | Gross profit | $10,500 | $2,900 | | Crew-days | 7 | 0.5 | | GPPCD | $1,500 | $5,800 |
Job A is the one the salesman rings the bell for. Job B is the one nobody brags about. But every day your crew spends on Job B–type work earns almost four times what a day on Job A earns. If you could fill a season with Job B, you would run a smaller, calmer, dramatically more profitable company.
That's not an argument to stop selling sunrooms. It's an argument to know what each lane actually pays before you decide where to point your marketing, your sales team, and your crews.
What's a good number?
It depends on your overhead, and yours is not your neighbor's. But here's the frame I use:
- The floor is your daily overhead per crew. Add up everything the
- The target sits comfortably above the floor. If your floor is $2,000,
business costs to keep the lights on — rent, trucks, insurance, salaries, the lights themselves — and divide by the crew-days you actually produce in a year. (Marketing gets its own math — cost per lead, cost per sale — keep it out of the nut.) For a lot of mid-size shops that lands somewhere around $2,000 a crew-day. Below that line, a job type isn't thin. It's losing.
jobs printing $3,500+ per crew-day are carrying the company. Jobs in between are thin — not losses, but not what you build a business on.
Run every completed job from the last twelve months through the division and sort. Three piles show up every time: the job types that print, the ones that are fixable (usually with speed), and the dogs you've been keeping around out of habit.
Speed is the lever
Here's the part that surprises people: the fastest way to raise GPPCD on a thin job type usually isn't raising the price. It's cutting a day.
Take that sunroom: $10,500 of gross profit over 7 crew-days is $1,500 a day. Get the same job done in 5 days — better staging, pre-fab, tighter scheduling, whatever it takes — and the same job now earns $2,100 a day. You just gave yourself a 40 percent raise without touching the price, and you freed up two crew-days to go earn on the next job.
Price increases meet resistance in the market. Speed increases meet resistance only in your own operation. One of those you control.
The hard input: do you know your crew-days?
Here's the honest catch. Most contractors' books can tell you price and margin, because the accountant needs those. Almost nobody's books can tell you how many days a crew actually spent on a job, because nobody made them write it down.
If that's you, start today. It's one field: job number, days on site. Thirty days from now you can score a month of jobs. A year from now you'll know your lanes cold — which job types to feed, which to fix, and which to walk away from, no matter how good the ticket looks.
The ticket is what the customer paid. Gross profit per crew-day is what you kept, per day of the only resource you can't buy more of. Track the second one.
Kip Lee spent forty years in home improvement — two-time Inc. 500, Qualified Remodeler Top 500 five straight years. He's the founder of myEASysystem and the author of "The 48 Questions No Marketer Ever Had the Guts to Ask You." Read Chapter One free at kiplinglee.com.
From The 48 Questions No Marketer Ever Had the Guts to Ask You. Read Chapter One free →